There's Always A Catch

This newspaper has commissioned numerous surveys on the precise nature of its readership and has determined that - bear with me on this technical jargon peculiar to the publishing industry - you are not just a bunch of nincompoops.

You're smart folks (hence your interest in the Work & Money section and, ahem, this column). That being the case, you likely dwell somewhere in the vanguard of various culinary appreciations and, no doubt, have great affection for that most exquisite of Japanese cuisines - sushi.

Combining the two qualities (brains and bait) helps us appreciate what Alan Greenspan did last week.

The Fed chairman made money cheaper. He lowered interest rates for the second time in less than a month, sending Wall Street into a frenzy of irrational exuberance that tacked almost 450 points onto the Dow Jones Jones Industrial Average.

Half-full, or half-empty?

Imagine yourself pulling up to the table in your favorite sushi restaurant when the waiter approaches with fabulous news. Prices have been sliced in half. Holy mackerel!

But there is a catch. A super tanker with 25 million tons of Green Dye No. 2 - similar to what makes lime Jell-O green - foundered last week while passing through prime sushi fishing grounds.

So your dinner, although perfectly palatable, will have a certain neon, glow- in-the-dark, Chernobyl quality to it.

What do you do? Indulge your tastes at half price or hook some fried chicken at the strip mall next door?

That's the dilemma smothering the Japanese economy and threatening the US - that no matter how cheap prices get, no matter how low interest rates fall, pessimism and anxiety become so prevalent that demand evaporates.

In Japan, for example, interest rates are near zero, and parliament has agreed to inject billions into the banks. But banks won't lend, businesses won't borrow, consumers won't spend, until they believe the economy will start growing.

Mr. Greenspan, by most accounts, made the right move to keep deflation from US shores. But this unexpected action indicates strong concern that problems in Japan, the rest of Asia, and Russia are getting too close.

The troubling element is that there is only so much Greenspan can do.

Jim Tyson's articles, starting on Page B1, show that about a third of the globe is in a repression, and Japan holds the key. Greenspan doesn't control events there. He also doesn't control events in Europe, where some key central bankers still resist calls for similar rate cuts.

This deflation is a peculiar animal. We haven't seen it for decades, and, on the surface, it's not all bad. It simply means that prices go down. What's not to like?

Look no farther than the Eric Evarts Encyclopedia of new cars for this year, starting on Page B3.

It covers some terrific new innovations in autos at some terrific old prices.

Ford, for example, has lowered prices virtually across the board. Jeep rejiggered its popular Grand Cherokee - longer, wider, taller, faster, more comfy - with no structural damage to the price.

Some of these lower prices come because automakers now make betters cars more cheaply. But much of it comes because the world has too many automakers and not enough auto buyers.

In technical jargon - too much "stuff" in the world: too many plants, too much steel, too much cheap labor.

Too much neon green sushi.

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