Re: Uncle Miltie, he dead
On Nov 18, 2006, at 4:44 PM, tfast wrote:
Here is a new term “Functional Level of Unemployment” or FLU for
short. Let us define the FLU as existing about or around the actual rate of unemployment with a floor of 5% in the US and 6.5% in Canada and
suggest that anything below that rate requires monetary tightening to
induce just enough flexibility into wage demands such that accumulation can resume apace. Anything above those rates defines a space where workers are
too tired and to insecure to demand higher wages. Kinda of like having
the FLU. You will find a good deal of empirical support for this hypothesis:)
Ah, but never forget Greenspan in the late 1990s, celebrating how
much more scared workers were than the unemployment rate suggested
they should be. Kept down those pesky wage demands. Fear of infection
is almost as good as the disease itself.
Doug