Bad Credit Mortgage Refinance ®
		Home Page We're about Mortgage News You Can Use     Greenspan: Trade Protectionism May Hurt Intl Prosperity Monday January 26, 7:18 pm ET By Joseph Rebello WASHINGTON -- Federal Reserve Chairman Alan Greenspan warned Monday that nostalgia for the easy prosperity of the 1950s could mislead U.S. policy makers into raising barriers to trade, a move he said would be "unexpectedly destabilizing" to the global economy. Speaking to a conference of economists in London, Mr. Greenspan said U.S. and British policy makers managed to reduce the frequency and depth of recessions after World War II by making their national economies more flexible and competitive. But that long-run stability came at the cost of frequent and sometimes painful short-run upheavals in the labor markets that made many people question the wisdom of the flexibility, he said. "Disoriented by the quickened pace of today's competition, some in the United States look back with nostalgia to the seemingly more tranquil years of the early post-World-War-II period, when tariffs were perceived as providing job security from imports," Mr. Greenspan said in prepared remarks that he delivered via satellite from Washington. "Were we to yield to such selective nostalgia and shut out a large part, or all, of imports of manufactured goods, our overall standards of living would fall." Mr. Greenspan didn't discuss the near-term outlook for U.S. monetary policy. Fed policy makers begin a two-day meeting Tuesday to discuss whether short-term interest rates need to be changed. Analysts widely expect the Fed to leave the key federal-funds rate unchanged at 1%. Over the last year, Mr. Greenspan has expressed regular alarm at signs that U.S. policy makers are wavering in their desire to ensure free trade and investment around the world. In 2001, for example, President Bush imposed tariffs on certain steel imports -- and lifted them only last month, under threat of retaliation from the European Union ( News - Websites ) . As the U.S. trade deficit with China has ballooned, moreover, many U.S. lawmakers have threatened to enact legislation to restrict imports from that country. Mr. Greenspan said such moves, if extended, could undermine the prosperity the world has enjoyed for decades. Over the last 30 years, he said, the proportion of desperately poor people -- those living on less than $1 a day -- has " markedly declined" as global output per capita has increased at a rate of more than 1.5% a year. "For the most part, we in the United States have not engaged in significant and widespread protectionism for more than five decades," Mr. Greenspan said. " The consequences of moving in that direction in today's far more globalized financial world could be unexpectedly destabilizing." Mr. Greenspan said economic flexibility often seems to be "the antithesis of job security." Every week, he said, a million U.S. workers leave their jobs -- two-fifths of them involuntarily as businesses shut down or change locations. Yet the ease with which employers can dismiss workers also makes them less cautious about hiring them. As a result, a million workers "are also newly hired or returned from layoffs every week, in part as new facilities come on stream." "Over the years, more than 94% of our workforce, on average, has been employed as markets matched idled workers seeking employment to new jobs," Mr. Greenspan said. "We can thus be confident that new jobs will displace old ones as they always have, but not without a high degree of pain for those caught in the job- losing segment of America's massive job-turnover process." Mr. Greenspan said the flexibility of the U.S. economy increased its ability to withstand shocks in recent years. "I do not claim to be able to judge the relative importance of conventional stimulus and increased economic flexibility to our ability to weather the shocks of the past few years," he said. "But it is difficult to dismiss the improved flexibility as having played a key role in the U.S. economy's recent relative stability. In fact, the past two recessions in the United States were the mildest in the postwar period."   Back to Original Article: Mortgage News You Can Use   Continue with: Fed expected to keep promising `considerable period' of low interest rates Consumer Confidence Index in U.S. Jumps to 96.8, Highest Since July 2002 Gold Coins MBA Releases Long-Term Forecast for U.S. Economy and Housing Finance Market CBO Says '04 Deficit Will Rise to $477 Billion The Jobless Recovery A Cheap Dollar Boom Consumer Confidence Rises in January
		Eliminate Credit Card Debt - San Diego Real Estate