As the World Turns

Menzie Chinn provides some very good material. It is sad One has to wonder if she really speaks English. This Post contains really good elements, and Readers should take the time to interpret. My only comment states base Wage rates have been too sluggish, while Stock Options and Bonuses continue to expand. Craig Depken can be informed that basic Marine Enlisted Wages did not exceed about $18 per month until at least WWI. I have no Source information, but know their Wages did not reach $60/month until 1940. Tyler Cowan has a relatively good defense of the IMF, mainly consisting of questioning what We would replace it with when encountering future problems. Consumer Confidence is up, but I wonder in what exact context.

The current News is the rumble from OPEC that Oil prices are dropping too rapidly, and that Oil Speculators are trying to use it to boost Short-term Gains. The truth may be, as I reinterate may be, that OPEC cannot restrict Oil production, due to the fact such interruption of production will have even worse impact upon Investment schedules in the OPEC nations. A secondary effect impacts Consumer Confidence; Consumers expecting relief from the high Energy pricing makes up the overwhelming majority of the Confidence rise, and efforts to destabilize that decline will bring a downturn in Expenditure patterns. It would not be beneficial to either the U.S. economy, or to OPEC.

American Business must relearn lessons once taught by Economists after the Great Depression. Nothing so drastic could happen now (God forbid), but Consumer Incomes have been running behind both Business Profits and Prices for too many Years. Consumer Credit Debt still afflicts less than half of the Consumer Households, but there are two distractions from assuming well-being; those with Consumer Debt suffer high monthly payments in comparision to their Income, and those without Consumer Debt will not buy much without an increasing Income. It does not matter if there is a Money Supply constriction due to improper Government policy, or due to reasonable Household Consumption response; it still remains a constriction. lgl