Business world: Feeling like the fifties
Slow growth, low interest rates, bare hints of inflation and a political preoccupation with raising taxes to try to keep pace with government spending. Has the U.S. been here before? Arguably it has, in the 1950s.</br></br>The Elvis Decade is a tempting comparison for the Clinton Hour. The president goes to the mike this week for the fiscal medley the congressional leadership has scored for him. Like a lot of the Eisenhower-era budget bills, it is a song of stasis that won't singlehandedly close down the economic show.</br></br>Over the long run, higher tax rates on income from success and saving will retard economic opportunity. Not a lot of those taxes actually will be paid, but they will be avoided, and in the process capital won't be optimally used. "Animal spirits" will still galvanize the venturesome -- levies below 50% won't keep them down -- but fewer will go flat out. In the 1950s mode, wealth is built more slowly, more equally, less openly.</br></br>The good news is that, if otherwise not too hindered, the economy could swamp that tax legislation; like the mighty rivers of the Midwest, it will go more or less where it wants. At the moment, it seems to be reinforcing the more desirable conditions of '50s, relentlessly beating down the cost-of-living in our joyless recovery.</br></br>The consumer world-wide, and especially in the U.S., has never had it so good. Nearly everything is falling in price and rising in quality. Computers. Long-distance telecommunications. Clothing. Fuel. Sporting goods. Even the "domestic" auto manufacturers are containing themselves in their flush times. Intense competition drives the show. The major exceptions are those areas of the economy dominated by government and its unions: schooling, transit and law enforcement.