>>>>I wonder why NO SOLUTION WAS OFFERED? I wonder why the solution of stopping the movement of manufacturing operations to off-shore locations wasn't suggested?
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>>>>Does anyone reading know what the "solution" is for "deflation"? I'd sure like to learn it.
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>If you are thinking of buying a shirt, you could wait a few months, hoping that its price will fall because of a factory moving overseas. But you probably won't wait for that reason. Factories have been moving overseas for decades. Generalized deflation is what is happening now in Japan (where many of our factories went) and what Alan Greenspan is beginning to worry about. The price of everything keeps falling, so nobody wants to buy today, and the economy keeps shrinking and reducing spending capacity. The only solution I have seen is to improve on economic fundamentals and hope that things get better. Mr. Greenspan might not have had anything to propose that was specific to the problem of deflation.
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>It is also worth noting that the chairman of the Federal Reserve (if that's his correct title) is not responsible for making overall economic policy. That's just as well, since he is appointed, not elected. Mr. Greenspan is an exceptionally influential and widely respected chairman, so his statements get a lot of attention. He considers it his job to be very careful about what he says. He endorses tax cuts, but not with too much enthusiasm, and criticizes deficits, but not with too much alarm.

Bret;

The following is offered tongue in cheek.

In a consumer based economy you must perpetuate economic growth. I would suggest the engineering principles I learned in college were correctly aligned with this in mind. What I am suggesting is the Japanese model of “quality in product” dissolves this basic and important part of the economic model which we created. By adding quality people do not buy as often, few objects have to be created and manufacturing decreases.

With decreased manufacturing comes migration to cheap labor pools. Japan moved much of its manufacturing capability to reliance upon China and Korea as an example.

About 15 years ago Nikon Camera (Nikons cameras are used by over 90% of the worlds professional photographers) set up a manufacturing plant in South Korea with this comment: “It will be five years before the quality of the South Korean plant meets our quality standards”! What? Why buy a Korean made Nikon? To simply keep up the economy and allow Nikon to continue business with a cheep labor source is the answer!

What I am suggesting is getting back to that wonderful term of the late 1960’s and early 1970’s – “Designed for obsolescence”! United States engineers were (and are still to some degree) famous for designing a product (car, television or what have you) that would break one day after the warranty expired. It would cost less to buy a new one than to have it repaired. This maximizes manufacturing need and stimulates the economy.

Then too we should not forget the importance of the marketing department that demanded you change the color of your refrigerator each year when a new model came out. One must “keep up with the Jones’s”! By the way did anyone ever figure out who the Jones’s were?

This is less than one percent of my theory and from here it gets bloody! Just think of how large our garbage dumps will become with all the broken manufactured goods that have been replaced. We had better invest in industrial dumps – that is the wave of the future! :)

Tom