[P2P-F] GM Rattner : "US productivity grew right through the recession"

Wed May 25 14:05:38 CEST 2011

http://www.truthout.org/why-rich-love-high-unemployment/1305061465

<http://www.truthout.org/why-rich-love-high-unemployment/1305061465>
excerpted:

General Motors (GM) car czar Steven Rattner
argues<http://www.washingtonpost.com/opinions/the-right-path-on-jobs-jobs-jobs/2011/01/30/ABqPCME_story.html>
that
America's unemployment crisis is a sign of strength:

*"US productivity grew right through the recession"*
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*Rattner comes dangerously close to articulating a full-unemployment policy.
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*Workers' wages and salaries represent roughly two-thirds of production
costs and drive inflation. High inflation is a bondholders' worst enemy
because bonds are fixed-income securities. For example, if a bond yields a
fixed five percent and inflation is running at four percent, the bond's real
return is reduced to one percent. High unemployment constrains labor costs
and, thus, also functions as an anchor on inflation and inflation
expectations - protecting bondholders' real return and principal. *
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*Thanks to the absence of real wage growth and inflation over the last two
years, bond funds have attracted record inflows and investors have profited
immensely.<http://online.wsj.com/article/SB10001424052748704530204576237182248727802.html>
*
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