Letters Editor NEWSWEEK
New York, NY
I was just about to fire off a congratulatory note to you regarding Robert Samuelson's excellently researched article "The Crash of '99" (Newsweek, Oct. 8, 1998) when I hit upon its closing, highly opinionated, paragraphs. Unlike most of the piece, the latter passages read as if they were written by the global banking powers that be.
Down with the interest rates, Samuelson urges. "This would ease the debt burdens on businesses and consumers."
Bull! The rate drop only applies to NEW borrowers. Worse, borrowing more money now when consumers are already spending more than they are saving (the savings are at the 63-year post-Depression low!), just because the Fed's interest rate has been slightly lowered, is a self-serving Wall Street hogwash. For, the drop may also fuel inflation, which has been the Fed's main economic bogey for years. At a time of slowing demand from overseas buyers, especially from Asia, a rise in inflation would hardly be cheery news for Main Street entrepreneurs.
So who benefits from lower interest rates? The equity markets. And the lenders (banks). Period. That's who the Fed is really propping, not the U.S. economy. It is another Wall Street bailout and a Main Street sellout. Samuelson's closing remarks make him a part of the problem, not of a solution.
Perhaps the ultimate solution to the credit crunch and the "Crash of '99" is for consumers and businesses to stop borrowing altogether and learn to live within their means. Do I hear an "ouch" echoing through the skyscraper canyons of Wall Street? On the other hand, does anyone still remember the Good Book which said that "the love of money is a root of all kinds of evil?"
Also check out... "Debt Is Good! Really?," "Kosovo: Another Vietnam?", "Banality of Bombings", "Greek Archbishop: Stop This NATO Attack," "You Were Wrong About Gen. Perisic", "New York Times' Kosovo News Manipulation", "Plus, Another Kosovo News Cover-up", "Embarrassed About Such 'Serbs'," "Put the UN Justice on Trial", "Another Wall Street Bailout, Another Main Street Sellout", "Does WSJ Dance to Wall St. Bankers' Tunes?", "Clinton Fiddles While Milosevic Burns", "Let the Bombing Begin? Not!" , "What's Good for the Goose..." and "Journal's Rotten Apples" (Wall Street Journal); and "Stock buybacks: Wall St.'s Duping of Main St.", Business Week).