Alan Greenspan

Re your March 21 editorial on Federal Reserve Chairman Alan Greenspan: Major cost items, milk, gas, employment and taxes are up. Major asset prices, homes and stocks, are up. Profit margins are low, especially compared to stock values as measured on a times-earnings basis. Therefore:

1. Business is paying handsome employment costs: recruit, train, retain and retrain--all non-wage costs that are not measured directly.

2. Productivity is up but has been offset by productivity increases of the competition and employment costs. Profit margins are low in the majority of the economy.

3. Taxes are consuming most of the productivity gains, and spendable wages are marginally down. Look for people asking, then demanding, to know why.

4. Stock prices are becoming very high for the average investor.

5. Where are savings? Third-quarter measurements were in at 2.1%. If there is little inflation, saving is being reduced by something.

There is no doubt that there are bubbles in our bubble. How Greenspan gets them to leak slowly is one question, and in what order is the other question.

PARKER LYONS

Irvine

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I’m glad The Times editorialized against the Federal Reserve Board deciding when America’s shareholders have gained enough. The flip side is that the Fed should not decide when America’s workers have made enough, either.

The Fed considers either high employment or rising wages inflationary. When these occur it punishes business by raising interest rates, forcing business to reduce wages and even lay off workers. Fed policy (along with record immigration levels) explains why worker income has fallen farther behind management income in recent years, even though recent years have seen record low unemployment. While Congress raises the minimum wage, the Fed depresses wages.

If consumer prices rise, the Fed should step in to control inflation. Other facets of the economy should be none of the Fed’s business. I hope Congress proves wise enough to make this the law.

KENNETH PASTERNACK

Santa Barbara

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Noting the admiration and awe of so many people for Greenspan, I now understand the effects of witch doctors in other primitive societies.

KURT E. SHULER

Rancho Santa Fe