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Where, oh where, is

Alfred Lord Tennyson

when we need him now?

Nasdaq to the right of them
OPEC to the left of them.
Volleyed and thundered ...

And so the Open Market Charge goes forward. Just as the oil price eases up, ensuring benign inflation numbers ahead, just as the tech stocks tumble, taking a little edge off the bubble, the


raises interest rates again.

Forward the Fed Brigade!
Was there a man dismay'd

All my adult life economists have preached that America's great problem was a slow rate of productivity growth. Wage growth above productivity! That was the eternal danger, the mortal risk, the root cause of dread inflation.

Where are those economists now?

Suddenly, productivity growth is up -- and

Alan Greenspan

now tells us that a


productivity growth rate is our problem. Why? Because, he says, it adds too much to household income. Or, as the


story has it, too much to "expectations of future corporate earnings, thus inflating stock prices and financing the unprecedented boom in consumer spending."

Not tho' the people knew,
Someone had blunder'd

Productivity growth is about aggregate


. It has nothing to do with income! It has nothing to do with stock prices or corporate earnings! When productivity increases, and runs ahead of wages, prices must


. Or wages can go up too, if they will,


putting pressure on prices. Increased productivity is a free gift.

It is anti-inflation insurance


Or so I thought.

Put another way,

how can low productivity growth and high productivity growth both be causes of inflation?

(Particularly when, as any observer can plainly see, there is no inflation?)

Their's not to make reply
Their's not to reason why

And will they do it again, six weeks from now? You bet they will.

Half a point, half a point,
Half a point onward

James K. Galbraith is not particularly fond of Tennyson. A professor at the University of Texas at Austin and senior scholar at the Levy Economics Institute, he worked for many years on the staff of the House Banking Committee, where he conducted oversight of the Federal Reserve. He welcomes your feedback at .