Strategic ambiguity today

["Lisa & Ian Murray" <seamus@xxxxxxxxxxxxx>]

Rambling before Congress today, AG stated:

"The surge in spending had lifted the growth of the stocks of many types of
consumer durable goods and business capital equipment to rates that could not be
continued. The elevated level of light vehicle sales, for example, implied a
rate of increase in the number of vehicles on the road hardly sustainable for a
mature industry. And even though demand for a number of high-tech products was
doubling or tripling annually, in many cases new supply was coming on even
faster. Overall, capacity in high-tech manufacturing industries rose nearly 50
percent last year, well in excess of its rapid rate of increase over the
previous three years. Hence, a temporary glut in these industries and falling
prospective rates of return were inevitable at some point."
<http://www.federalreserve.gov/BoardDocs/HH/2001/February/Testimony2.htm>

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When did this move from contingent to inevitable? Wasn't all that supply chain
management software and demand forecasting technology that the Bill Gates' of
the world told us would get rid of the disconnect between supply and demand
dynamics in the critical sectors of the economy supposed to solve this problem?
How soon before they start blaming workers for the downturn, or at least start
laying on the deniability rhetoric for the Fed's own failures?

Will computer networks in supply chains of various commodities ever improve the
self-prediction of capital and consumer goods markets? We know they don't do it
for financial markets nor can they it seems. Is there something along the
outlines of yet another contradiction of capitalism coming into focus if, as
Albin and others suggest, the economy has Turing level complexity? The futile
striving to make the EMH true for financial markets is precisely what is to be
avoided in capital goods and consumer goods markets....randomness that precludes
the formation of market power and predictive power.

Enough rambling....


Ian

"Great wealth is useless, and may be worse." [L T Hobhouse]