Tuesday, June 03, 2003

I just got around to reading the Sunday Boston Globe (yes, the General has other things to do in life besides blog!) and read a short but quite incisive article by Charles Stein of the Globe staff titled "A pickup in growth? Don't count on it" (sorry, no link -- the Globe is stingy).

Stein argues there are three basic reasons why we won't see the much ballyhooed 'post-war recovery' of the US economy: [1] overcapacity ("too many office buildings, too many computers, and too much debt") linked intimately to globalization ("brutal competition and a relentless search to keep costs and prices down"); [2] technology (productivity especially has driven down prices as well as driving out jobs); and [3] Big Box retailers (aka the 'Wal-Mart effect' where Wal-Mart offers you "low low prices" by squeezing blood drop by drop from their suppliers).

Stein thinks deflation is unlikely ("too bearish for me") but gives no reasons for his evaluation. Other than that, an insightful article, especially for the mainstream press. Perchance General Glut is reaching his audience after all!


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