Federal Reserve and Jobless Rate

* Re “Fed’s Decision Tied to ‘Natural’ 6% Jobless Rate,” Aug. 29:

I’m sure every member of the 120-million-plus American work force is heartened that Federal Reserve Board Chairman Alan Greenspan’s policy is that the economy must maintain at least 8 million American workers unemployed in order to be “natural.”

During the Kennedy and Johnson administrations, when interest rates were closer to 3% and inflation about 1.5%, it was considered that “natural” unemployment was 3%.

The Republican “natural” rate of 6% is aimed at controlling the power of labor unions and giving Republicans greater opportunity to criticize welfare, which is caused by unemployment. “Kill two birds with one stone,” so to speak.

BRYAN W. STEVENS

Rolling Hills Estates

* There is nothing natural about unemployment. Rather, it is the creation of our capitalist social system. To accept our current rate of unemployment as the best we can do is to essentially write off the components of that unemployment rate, including the 10% unemployment rate of Los Angeles and the 20%-plus rate of South-Central Los Angeles.

Even if we move beyond the economic stagnation of California to look at the national picture, economists who see us at the precipice of dramatically high inflation really haven’t paid much attention to labor markets recently. The only workers whose pay goes up regardless of unemployment (and profits) seem to be CEOs. Most working Americans’ wages have not kept up with inflation for the past 20 years! As our manufacturing job base has diminished, those with high school educations have seen their pay fall the most. However, in recent years we now realize that even the college educated are finding the job market tough.

These difficulties demonstrate that the private sector is increasingly incapable of providing quality jobs. Very few workers are in a position to leverage employers into doing so. As a result, only those wearing hallucinogenic spectacles like Greenspan can see inflation on the horizon.

DAVID R. WELLS

Los Angeles

* Typically, economists focus on part of the picture and ignore the rest.

The 6% statistical unemployment figure represents an actual unemployment rate of 10% or more. These theorists are proposing that over 10% of our population should support themselves by government programs or criminal activity.

Not too long ago, economists were wringing their hands over the budget deficits and the national debt. If they accept 25 million people on welfare, unemployment, or committing crimes, doesn’t that make the debt and deficit continue their upward spiral?

In the Aug. 29 Times Business section, James Flanigan states that the cost of a single individual who turns to crime instead of earning wages is “millions” over a lifetime. The total cost to the taxpayer of an individual choosing a life of crime over honest labor is thus far greater than the money he needs for subsistence.

It is a strange world when important public officials believe that people having good jobs is more of a threat to our national well-being than poverty and crime.

DAVID S. ROBINSON

Laguna Hills

* Economists who think 6% unemployment is “natural” should be driven from their realm of virtual reality into the ranks of the 6%.

CHARLES T. NEWTON

Del Mar

* It does not surprise me (although it does sadden me) that the oligarchs on the Federal Reserve Board have given up the battle to keep Americans employed. After all, they have jobs. It’s natural that they should be more concerned about inflation than employment. But I doubt that the people of this country will look away as blithely as the Fed when almost one of 15 citizens has no job.

It is unconscionable that an unelected body that must answer to neither the President nor the Congress has so much control over our economy. It is time the American people took that control back from the Federal Reserve.

THOMAS ROGILLIO

Glendale

* Re “Fed Hikes Interest Rates Again; Blow to Recovery Feared,” Aug. 17:

It’s a shame when the Federal Reserve Board thinks it’s more important to control prices than it is to let as many people as possible work. Is it better for everyone to pay a little more for something, or for some people not to be able to afford to buy anything at all? The choice should be obvious. Once again, it’s a case of the haves versus the have-nots, the rich getting richer, and the poor getting poorer.

It also shows how crime and economic issues are intertwined. Is it a crime when the have-nots strike back, or is it a crime what old Mr. Greed-span is doing? It’s a shame.

DOUGLAS FRITTS

Inglewood