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Don't worry, be happy, we've WON

February 25, 1999

Now that we've WON, or Whipped Onflation Now, (Jerry Ford never made any arrangements for tense) what are we to do?

Two years ago, the professional worriers all wrote that economic growth had to stop and that the lengthy run of low inflation positively had to end because that's just the way the market system works.

But today growth is continuing and inflation is at 1 percent in the G7 nations, which are not to be confused with the Philippines, Thailand, Malaysia, Sweden or any of the other G-string nations.

Maybe we have indeed learned to effectively control inflation through monetary steerage by the central bank. Inflation, a thing of the past. So are all the worriers happy? Heck no!

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If they can't worry about inflation, they will worry about something else instead: Deflation. Which, of course, is even worse than inflation.

The problem, the Economist magazine darkly warns this week, is that prices are too low and getting lower.

Well excuse us for being able to feed our families and for being able to afford a TV in every closet.

Economics writer Robert Samuelson has been writing for the last half-decade that we are on the brink of economic collapse, on the brink of living in caves and fighting our neighbors to the death for the last shred of rat on the carcass. For five years he's been wrong. But is he discouraged? Ha. And you know, one of these days he will probably be right.

Just as if I wake up every morning and scream "Today there will be a total eclipse of the sun!" for the next 30 years, eventually I'll hit it.

The Economist is even more sour. Global productivity, now that we've tapped into the much-celebrated and unlimited potential of computerization, industrial technology and 10-year-old Asian kids, is at an all time high.

That pushes prices down. And demand is low worldwide, because in places like Russia factory workers are still being paid not in cash but in surplus hanks of underwear elastic.

Ipso facto, says the Economist, "On current forecasts, the global "output gap" between actual and potential production will, by the end of 1999, be at its widest since the 1930s. If the economies of America or Europe were now to take a sudden lurch downward, the world might easily experience outright depression, with prices and output falling together, just as they did 70 years ago."

Oh yeah, yeah, yeah. That's what they said 70 years ago.

OK, bad example.

But can't these people just be content and enjoy the ride? Tomorrow we may be eating cigars and burning shares of Ebay for heat, but today, woo-hoo.

Come on, buy that Jeep Grand Cherokee for the kid. Don't listen to Samuelson's rants that we're foolishly spending our savings and one-time stock market profits.

Just because he didn't buy Yahoo! at $19 a share doesn't mean he has to get testy with the rest of us.

Speaking of which, please tell me you're not worried about the sky-high Internet stocks.

If you own shares of America Online, don't worry that an Internet Service Provider in the UK is already offering access to the World Wide Web for free and others will doubtless follow.

If you own shares of Amazon.com it shouldn't concern you that Wal-Mart, with its $130 billion in annual sales and its reputation as a ruthless competitor, is beginning to show interest in online retailing.

If you own shares of Yahoo! what's it matter that brand loyalty is virtually nonexistent in the Internet culture and some now-unknown portal service is always just one gimmick away from robbing an established player of its customer base.

Don't you see, American consumers are propping up the world. It's our prerogative, nay, our duty to snatch up shares of companies we've never heard of and spend the profits on extravagances. Don't think of it as buying a silver embossed ceiling fan for the dog house. Think of it as doing your part as a good global citizen.




Tim Rowland is a Herald-Mail Columnist

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