John R: ‘On PBS a few minutes ago, Treasury Secretary Paul O’Neill tried to play down criticism that the forum’s attendees aren’t representative of everyday people. He cited attendee Marilyn Carlson, ‘who owns a travel business. She should be able to give us perspective about what it means to be on the front lines.’ Well, Marilyn Carlson’s ‘travel business’ is the Carlson Companies, the privately-held conglomerate that owns the Radisson hotel chain, TGI Friday’s, and a dozen other entities. (See She’s the daughter of the late Curt Carlson, the wealthiest person in Minnesota. That’s the Bush administration view of what it must be like to be on the front lines?’


Bill: ‘Your rants are finally getting to me. I voted for W. because I liked his public political agenda. And I still do. But this Florida thing got to me, finally. You just may get me to register as something other than Republican.’


Click here. The author’s conclusion, thankfully, is no, probably not – our system is more flexible and resilient than Japan’s. But the analysis is interesting.

One thing it reminds us of is how hard it is – for us, certainly, but even for the Fed – to know what’s really going on with the money supply. The obvious measure: how fast the Fed is letting it grow. But is rapid growth in the money supply inflationary? Or even an effective boost to our economy? Not if most or all of those newly printed dollars are merely being used as currency in other countries, where greenbacks are the unofficial currency. And not if the velocity of money is slowing. When that happens, yes, there are more dollars, but each one of them, by moving around less quickly, does less work. Back when interest rates were sky high, people would race to the bank not to lose a weekend’s interest. Now, with interest rates on short-term money all but zero, who cares if a check takes an extra day to get deposited? Or if it’s not just pennies, but dimes and quarters, that sit, unused, in a jar?

Is the Fed pushing on a string? Does deflation loom? No, probably not that, either, says the author; at least not in a major way. But the discussion, if you have time, is informative.


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