> The global economy is heating up as Europe, Japan
> and several emerging markets recover from
> recessions. This is causing commodity prices to
> rebound, increasing the prices of things like
> energy, which are also important ingredients of
> production costs.
>
> In addition, greater competition for capital in
> the rest of the world is curbing foreign appetite
> for American financial assets, driving the
> dollar's value down in recent weeks. This is a
> source of anxiety because the dollar's
> appreciation has shaved at least half a percent
> off our annual inflation rate during the last few
> years.
>
> In short, there is little evidence that labor
> costs are rising, despite tight labor markets,
> but there is mounting evidence that other factors
> have again shifted the balance of risks facing
> the American economy toward inflation.
Now if I am understanding Doug, the US state and American capitalists can't do much to relieve the pressure on costs from such developments (the dollar will depreciate and commodity prices rise due to upturns elsewhere, though they will prove to be quite shallow especially considering the depth of the downturns from which they are beginning, I imagine); whether American labor costs have been the effective cause of inflationary pressure, they are what elites are in a position to control and suppress to relieve cost pressure; moreover, even if the mid to upper echelon of the finance industry is responsible for whatever wage/salary/compensation increases there have been, the working class will still have to be sacrificed at the altar to combat inflation. If this is not accomplished through higher interest rates and unemployment, it will be accomplished by more union busting, coerced and unpaid overtime, intensification, etc. What measures is Tyson proposing to ensure that costs in relation to productivity will not be brought under control this way? Tyson's the kind of bourgeois economist who strikes me as granting, say, that while the French Revolution raised important concerns, they could have been addressed in a different, more rational way.
Anways, Europe, Japan and those several 'emerging' economies should soon be flat on their backs again. We'll see how long and deep these recoveries are. I don't see why they should inspire much confidence.
yours, rakesh