Unemployment 4.2%

[Rakesh Bhandari]

Having read the recent NYT and WSJ probings of Big Daddy Al's mind, I
couldn't help but think he himself does not believe the threat of a future
wage led inflation from having already dug too deep into the non active
workforce; he seems most interested in being able to play the card of a
major interest rate reduction in the face of asset price volatity and to
give him maximum room at the point of crisis he is clearly anticipating, he
seems to want to nudge interest rates up now. Greenspan has given
sufficient warning that he expects a Wall Street Crash on the spectacular
level of America in the 20s and Japan in the 80s while trying to reassure
us with the right monetary policy there need not be a catastrophe in the
real economy.

At any rate, I don't believe the US unemployment rate measures the
tightness of the labor market in which US capital operates. There are not
only the numerous invisible discouraged American and uncounted migrant
workers on whom US capital can call, there is now a massive surplus global
labor supply that has become available due to decreasing transportation
costs, the capability of building skills into transportable machines (see
MR Raghavan, The Technological Transformation of the Third World) and
improved telecommunications.

When Old Uncle Al prates on about the new economy due to the info tech
revo, he is in part talking about how those new techs have enabled US
capital to overcome  tightness in labor markets through 'globalisation'.

yours, rnb

ps thanks to Jim O Connor for the pithy and illuminating formulation of
accumulation through crisis.