RE: [Futurework] It's the economy, stupid!

[Ed Weick]

A little more on the state of the US economy.  The item by Bruce Little I posted earlier contains the following sentence: "The job report focused new attention on the Fed, which will meet in 10 days to decide whether to keep its target federal funds rate at 1.25 per cent -- a four-decade low -- or reduce it further." This makes one wonder what a further rate cut can actually achieve.  People don't seem to want to buy and investors don't seem to want to invest.  What the Fed may be able to do may turn out to be no more than pushing on a string.  The US economy may be into a liquidity trap. In an off list posting a few days ago, Keith Hudson added the following postscript: "P.S. Here's a curiosity. Most of my sales go to American choirs and I normally sell to several every day. Immediately after Sept 11, sales dropped away completely. In fact, it was weeks before they started picking up. They didn't get back to previous growth rates for 15 months! Nobody has been able to explain this. I certainly can't. Anyway, this week, sales to America have just dropped again! I haven't sold anything to an American choir since Tuesday! I can't recall that anything particularly dramatic happened on Tuesday, but it looks as though the same feeling of fear/panic/whatever has suddenly swept across America." It may be that people who are in a perpetual state of waiting for the other shoe to drop don't really feel like singing.  I sing rather badly in a very good little choir, but lately I've had to drag myself to do it, as have other choir members.  The sense of elation and joy that is needed for singing just isn't there.   The best that the US and the rest of us can now hope for, short of no war, is a short and snappy little war that gets things over in a week or so and allows us to breathe again.  If, as Keith predicts, the war will go on, and perhaps in one form or another on and on beyond that, we shouldn't expect Americans or anyone else to be in a mood to buy or sing for a long time to come. Ed Weick