Re: Reengineering the Fed

[John Gelles <jjgelles@xxxxxxxx>]

	It may be difficult to prove empirically that
	Redmond is exactly right -- but he is.  When
	a general view is taken -- and real growth is,
	say, 4 percent, then if one wanted some of that
	growth to be enjoyed by labor (to encourage
	them to continue contributing to such growth),
	real reward to capital would have to be held
	to a fair lesser amount -- say, half of it.

	Remember, wage labor would still be getting
	a paltry raise compared to management and
	owners.

	In WWII, when growth was maximized, real
	interest was negative, real growth was over
	7%.

	----- msg separator -----

	On Mon, 6 Oct 1997, Dennis R Redmond wrote:

	"What should the Fed do?  Keep real interest rates
	 consistently lower than real GDP growth."