Mary Lord wrote on 8/11/99, to discuss how wage increases are considered inflationary by leading economists and government officials, but record business profits and stock market increases, and lavish bonuses paid to CEO's, are either ignored as benign or lauded as signs of prosperity and a strong economy. Whenever the dread spectre of rising wages appears, Chairman Alan Greenspan and the Fed respond by increasing the US Treasury's interest rate -- in order to "cool off the economy."
This adjustment of economic activity is done, of course, by the government that prints the money, but it is nevertheless done according to the most orthodox principles of freemarket capitalism. Apparently "freemarket" economists don't believe the costs of the profits and capital gains and bonuses might be passed on to consumers in the form of price increases.
Today, 8/24/99, the Fed's 1/4-point increase in the interest rate was greeted by stock market investors with equanimity - Dow Jones Index prices retreated just 16 points after yesterday's record 11,299. However, the news reports don't indicate how many layoffs it will take to assuage the Fed's anxiety over the tightness of the job market. It is unlikely that job cuts will be met with comparable sanguininity by those left unemployed.