Excuse me for posting this on two lists, however in my opinion it covers the topics of both lists. As to Junk Economics, the question has to be, "Is this the result of economic theories and if so, what rational conclusion could be drawn about those theories? As to FutureWork, one has to consider what the value of work must be, when education, experience, loyalty, commitment are not used as criteria for employment, but that the international global economy, can get a hiccup or cancer and trash all the efforts of individuals who have diligently prepared themselves to provide for themselves and their families. Why should anyone believe in the value of work, when those who are the creators of work, the capitalists can wipe out workers at the stroke of an accountants pen. We get very little information about the effects on private lives in our newspapers, about the devastation going on in most of the world, and by and large, we get desensitized to what little we do hear. Yet hundreds of hours of TV time every day chart the capitalist game on Business News, talk shows with experts and government decisions, non of which tell the true horror of what their activities are causing in individual families. Think about it - it could be your horror story next week. Respectfully, Thomas Lunde NATIONAL & INTERNATIONAL BUSINESS Falling prices raise specter of global deflation SALLY JACOBSEN NEW YORK (AP) - In Brazil, once the king of hyper-inflation, prices for food and clothing are sliding. Apartment owners who refused to lease units during the days of high inflation are slashing rents. In Japan, food, beer and household goods cost less than a year ago. And prices for commercial land are off a staggering 63 per cent from 1992. In China, the government has ordered companies trying to get rid of excess goods to halt price wars. >From Asia to Latin America, consumers once victimized by surging prices are experiencing a new phenomenon: lower prices on a broad range of items - from crude oil, gasoline and farm commodities to computers and new cars. "For the first time in decades, there is widespread price deflation going on in much of the world," said Allen Sinai, chief global economist at Primark Decision Economics. Tumbling prices offer relief to consumers weary of paying more every year for many products. But deflation, or falling prices, can pose risks and uncertainties for consumers, companies and the global economy. In a deflationary spiral, workers’ wages would fall, leaving less money for bills and other payments contracted at higher prices. Consumers would find their key asset - their homes - losing value. Buyers waiting for prices to fall further would postpone spending, dampening economic growth. Businesses counting on stronger prices for their products would earn less than expected. With smaller - or no - profits, they would have difficulty paying wages and keeping current on debts. Bad debts would mount at banks, which would curtail lending. No one is yet predicting such a destructive cycle in North America, but economists are seeing more signs of falling prices and assessing the risks to the economy. "The prospect of deflation was laughable a year ago," said Greg Mastel of the Economic Strategy Institute in Washington. "Now it is a real risk (although) a low percentage risk." U.S. Federal Reserve chairman Alan Greenspan expressed concern recently about the prospect. "Deflationary forces are continuing to emerge," he said in congressional testimony. The possibility of widespread price declines causes unease because the last time there was a sustained period of deflation was during the 1930s Depression. The current round of U.S. price weakness has its origins in the financial chaos that began more than a year ago in Southeast Asia. With Asian economies weakening, demand for crude oil and other commodities skidded, pushing prices lower. Price-cutting by Asian manufacturers has forced American companies to lower what they charge for such goods as computers and new cars. American farmers have been especially hard hit by stumbling prices for beef, pork, corn and other goods, which Asian countries had in recent years snapped up in large quantities. Agriculture Secretary Dan Glickman says farmers are in their worst crisis in a decade. So far, U.S. consumers have benefited from the price plunges. In the United States, the inflation rate for the first nine months of the year was a mere 1.4 per cent - better than the 11-year low of 1.7 per cent recorded for all of last year. In Canada, the inflation rate has dropped to 1960s levels. In September, the annual rate dipped to 0.7 per cent, down from 0.8 per cent in August. Deflation has shown up strongly in wholesale prices, which are charged by farms, factories and other producers. For the first nine months of the year, U.S. producer prices declined at an 0.8 per cent annual rate, compared with a drop of 1.2 per cent for all of 1997. Wholesale prices also have fallen in other western countries, including Germany and France. Perhaps nowhere, though, have prices plunged so far so fast as in Brazil. Not so long ago, the economy of South America’s largest country was crippled by runaway inflation. In 1994, consumer prices shot up 2,400 per cent, and the government imposed a stabilization program. Brazil’s consumer prices slipped in July, August and September, the first back-to-back price declines since the government began compiling the figures in 1979. © The Canadian Press, 1998
