Wednesday
Aug182004
Falling consumer prices, that's perfectly predictable from my study of economics
Wednesday, August 18, 2004 at 04:06PM
My letter to the Editor At Forbes Magazine in response to a newsletter article: Consumer Prices Fall, Housing Rebounds [more 
]
The demand for food as we know, is somewhat inelastic, it's no surprise those prices didn't drop ( that's fancy econ talk for we gotta eat) , certainly less elastic than clothing , which declined in price and probably in no small part due to weakened consumer demand. Hence, clothing demand is probably a better indicator of where we are and headed economically. Oil's price as an indicator is subject to many non consumers influences , currently at least , to be of any forecasting value other than it's impact in reducing demand for other items , and that's bad news . We called it stagflation back in the early 70's , A prior time that the oil boys had us by the crotch I recommend David Halberstam's " The Reckoning " for and insightful and entertaining read on that era , but back to today .
Being a proponent of logical fact based economic analysis and policy as contrasted with the ideological "faithbased" variety , currently in vogue, which holds that tax cuts and unregulated foreign trade are the great panacea for all ailments economic, I ask: Is it not time that business leaders at least start wondering, where their profits will come from if we continue to reduce wages, and thereby significantly diminish our own highly profitable domestic markets? That question has been barred from the table to a significant degree by those controlling the levers of commerce.
Long-term interest versus short is the basic quandary. Sound decision making at the highest levels must answer the question, where do we want to be as a society ? This lessens the emphasis and allure of shorterm thinking .
To ignore the long-term society question puts at risk America's real business and societal interest; something earlier generations of American business leaders, seemingly, better understood; and that is fact, no romantic notion as any babyboomer can attest. How do you think we became so spoiled? We ran our businesses with a longer-term view and more concern for civic responsibility
What perplexes me is why we boomers , business leaders in particular , are content create a less prosperous future our own successor generations ? We still to no small degree, call the shots and shape the values of commerce. The ball is in our court, as they say. As the architects of downsizing , opportunistic mergers and accusations , outsourcing and the attendants of increases in both income disparity and poverty ,that's far to many lets, net shots and out of bounds serves on our watch , a few aces aside . As is the plight of all generations , court time is dwindling, that we can't control but the dwindling of the middleclass (The American consumer base) on our watch is in our control and therefore our responsibility.
Greg Fuller, BrownWatch Contributor
]The demand for food as we know, is somewhat inelastic, it's no surprise those prices didn't drop ( that's fancy econ talk for we gotta eat) , certainly less elastic than clothing , which declined in price and probably in no small part due to weakened consumer demand. Hence, clothing demand is probably a better indicator of where we are and headed economically. Oil's price as an indicator is subject to many non consumers influences , currently at least , to be of any forecasting value other than it's impact in reducing demand for other items , and that's bad news . We called it stagflation back in the early 70's , A prior time that the oil boys had us by the crotch I recommend David Halberstam's " The Reckoning " for and insightful and entertaining read on that era , but back to today .
Being a proponent of logical fact based economic analysis and policy as contrasted with the ideological "faithbased" variety , currently in vogue, which holds that tax cuts and unregulated foreign trade are the great panacea for all ailments economic, I ask: Is it not time that business leaders at least start wondering, where their profits will come from if we continue to reduce wages, and thereby significantly diminish our own highly profitable domestic markets? That question has been barred from the table to a significant degree by those controlling the levers of commerce.
Long-term interest versus short is the basic quandary. Sound decision making at the highest levels must answer the question, where do we want to be as a society ? This lessens the emphasis and allure of shorterm thinking .
To ignore the long-term society question puts at risk America's real business and societal interest; something earlier generations of American business leaders, seemingly, better understood; and that is fact, no romantic notion as any babyboomer can attest. How do you think we became so spoiled? We ran our businesses with a longer-term view and more concern for civic responsibility
What perplexes me is why we boomers , business leaders in particular , are content create a less prosperous future our own successor generations ? We still to no small degree, call the shots and shape the values of commerce. The ball is in our court, as they say. As the architects of downsizing , opportunistic mergers and accusations , outsourcing and the attendants of increases in both income disparity and poverty ,that's far to many lets, net shots and out of bounds serves on our watch , a few aces aside . As is the plight of all generations , court time is dwindling, that we can't control but the dwindling of the middleclass (The American consumer base) on our watch is in our control and therefore our responsibility.
Greg Fuller, BrownWatch Contributor