Word: economists
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Dates: during 1980-1989
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...being too tightfisted in its fight against inflation. So far, the new lineup seems to have done its job. Since last March the Fed has steadily reduced the discount rate that it charges on loans to member banks from 7 1/2% to 5 1/2%. Says Richard Rahn, chief economist for the U.S. Chamber of Commerce: "I don't think we would have had all those drops in interest rates without the new crowd...
Many of those questions have been asked before. In 1936 Economist John Maynard Keynes warned that "when the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill- done." His comments were a reminder of the speculative frenzy of the Roaring Twenties, which led, soon enough, to the Great Crash of Oct. 28, 1929. Last week, as the 57th anniversary of that dire event rolled around, new voices raised similar cautions. Said Robert Reich, a lecturer in public policy at Harvard's John F. Kennedy School of Government...
...ability of U.S. firms to compete internationally, some experts cite other factors besides stock-market pressure, like the cost of borrowing money, as reasons why American companies tend to focus on the short run. Says Frederic Scherer, an economist at Swarthmore College: "The cost of capital is higher for Americans, which means they have to show an earlier return on their investments. Cheap money allows the Japanese to take a longer view...
...flip side of the middle-class exodus that has many liberal scholars in an uproar. Economist Barry Bluestone of the University of Massachusetts believes the shift in the U.S. economy from unionized, factory work to service-industry professions has brought a substantial loss of jobs with middle-class pay. The blue-collar jobs tended to be unionized, goes the argument, while the new service industries typically offer no such wage and , job protection. Says Michael Boskin, a professor of economics at Stanford: "Some sectors of the middle class that had implicit security in their jobs have been rudely awakened...
...trend watchers, however, believe the middle class is being seriously eroded. Neal Rosenthal, an economist for the Government's Bureau of Labor Statistics, sees no real polarization in wages, for example. He found increases between 1973 and 1982 in the number of workers in middle- and upper- salary positions and a decrease in the low-income category. In this view, the middle-class shrinkage seen by other economists may be caused by the impossibility of matching some displaced workers to the new middle-class jobs that are being created. Observes Robert Lawrence, a senior fellow at the Brookings Institution...