Tuesday, March 07, 2006

Up and Down

Productivity was down in the last Quarter--not a substantial loss--but still a loss; this Author wonders why it did not come earlier as Labor inputs increased. Wages rose somewhere over 3%, Year over Year. Also not a heavy concern, as Wages are a Production Cost exactly like materials, and Inflation bothers only as a distortionate function (causing segments into higher Costs models without allowed reactive Price increases in their Products). The most distorted aspect to current Inflation being Energy Prices, Gas and Diesel both increasing over Thirty cents a gallon, Year over Year. Where does this place Us?

Every element of the Economy has felt constriction, because of rising Costs, without equative rise in Prices. Wages are starting to realign to match Consumer Price increases, but still has a long way to go as they have been advancing slowly since the last Recession. Business feels impeded in raising Consumer Prices, in the face of deeply advancing Energy and Health Care Costs. A third aspect must also be advanced: the fear of Corporate management of reduced Profit ratios, with the vast increase in Stock ownership by Labor (through 401k programs) and Consumers (through Mutual and Hedge Funds).

Economists would not mention the next Comment, but this Author is considered an Outlaw anyway: Corporate and Business Profits have to scale back! American society and Economy has tried too hard to secure a parasitic Profit from Business enterprise, by and through the issuance of financial paper--Stocks, Bonds, Stock Options and Stock Grants. All of the Later are trying to ride the horse through the last two furloungs, and be in the Winner's Circle. The trouble is they are nothing but Dead Weight, and insist on the same Return as the Jockey and horse. Oh, to reach that Unreachable Star! lgl

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