Feelings--Nothing but Feelings

It is all a Question of what "Is" is. I agree with Strauss-Kahn of the IMF that the American economy will slow, but disagree with the thought that it will be long and sustained. A Slowdown which is a Downscale will be a permanent thing, but a Slowdown involving sharp cutbacks will be nonexistent. People who have a Job will likely continue going to Work, though their Employers might rotate. There might even be an increase in Part-Time labor, and such attained without a substantial Layoff of permanent labor. I can even see Opportunity for creation of additional new Temporary Labor organizations–thinking this Service industry may even increase somewhere up to 14% of its current load; Business desirous of location of Temp skilled labor. The pace of American activity will slow, but the volume of productivity may change little, as American business firms its foundations.

The Technology sector is finding a reduction in Growth projections, but still finding a sustained market, which is good indication of the temperament of overall business. Forrester Research expects a 2.8% growth in information technology this Year, down from their 4.6% prediction in December. The Crab Orders (long-term Upgrade Contracts) are firmly in place, and Retail Outlets are continuing their purchase pattern; Everyone hoping that Turnover rates will continue in Retail.

I continue to read this morning, and find that Paul Krugman filed a Post which a basic better rendition of my first paragraph. I have a basic contention with him in his Statement that the high Inflation of the 70s and 80s was caused by the high Interest rates of the Fed. The high Inflation of the era was incited by deficit Government Spending, where Government induced a massive resource inflation by their purchase pattern. Understand that the Housing sector has never come close to absorbing the GDP percentages as produced by the federal Government’s 20% of GDP. Heavier Government Spending has always incited a subsidiary round of Inflation, while debate still continues as to the exact impact of high Interest rates; they obviously can become so high as to impede economic performance, but where is that exact level. I believe that any Interest rate below 8% can be endured by normal business practice without itself being Inflationary pressure. I do know that a Government deficit spending increase of 3% of GDP will always bring inbreed Inflation. lgl