At 11:01 98-01-10 -0800, Tom Walker wrote:
[snipped Tom Walker's comment on Greenspan's ...(see below for reason)]
Retaining here a few of Greenspan's words as quoted by Tom Walker (for
emphasis of what is to come below)
>
>> But deflation can be detrimental for reasons that go beyond those that
>> are also associated with inflation. Nominal interest rates are bounded at
>> zero, hence deflation raises the possibility of potentially significant
>> increases in real interest rates. Some also argue that resistance to
>> nominal wage cuts will impart an upward bias to real wages as price
>> stability approaches or outright deflation occurs, leaving the economy
>> with a potentially higher level of unemployment in equilibrium.
>
To which Tom Walker commented :
>The consignment of labour to the outer fringe of the economy is not a
>personal peculiarity of Greenspan's. It is the fundamental premise of the
>financial accounting system. Treating labour as a variable cost is rational
>from the short-term perspective of the firm. One can only imagine that it is
>still rational from a social perspective if one insists that the economy is
>nothing more than an aggregation of firms.
>
Probably a very crucial point that I (at least) could not possibly catch in
Greenspan's message. Here's why (the reason, I've been promising) :
In reading Greenspan I found myself forced to reread paragraph after
paragraph two or three times. After the third paragraph, I wondered if it
was me or what. To reassure myself of my lucidity I thought of applying a
little PCSTYLE DOS program to the text. Here are the results :
³ Sentences: 156 ³
³ Words: 3806 ³ Poor...Best
³ Words per sentence: 24.4 ³ 17. 7.0
³ % Long words: 23.0 ³ 14. 1.0
³ % Personal words: 1.7 ³ 0.0 9.0
³ % Action verbs: 0.6 ³ 0.0 2.5
³ Syllables per word: 1.8 ³ 2.5 1.0
³ Readability level: 18.9 ³ 18.0 6.0
Then, I knew I was still a little sane. And now I understand why the
markets go "BEARish" (if that is what they call it when it goes down) when
Mr Greenspan opens his mouth (regarless of what he says). It takes a few
days to make out what (if anything) is meant by what he says (whatever it
is).
>The lesson of the Asian crisis is that the limit of fictional accounting has
>been reached. Humpty-dumpty has fallen off the wall.
>
Now I must really reassess my will to catch up on some of the culture that
I could not devote the time deserving during my schooling, academic and
professional working carreer. Should I insist on trying to understand
"economics"?
>Regards,
>
>Tom Walker
Regards to you as well and hang in there. I'm sure glad some (very few)
seem to get it in this field.
André, P.Eng.
"The end of labor is to gain leisure." Aristotle.
-- ARG d'Ottawa ON Canada. Futuriste-au-loisir maintenant. --
