Federal Reserve

The Federal Reserve hiked interest rates once again, this time by one-half a percent (May 17). This seems a grave policy mistake, in my opinion. The recent stock market collapse has taken the air out of the speculative Internet technology bubble that Federal Reserve Chairman Alan Greenspan has repeatedly groused about, most famously in his “irrational exuberance” speech. Many investors have been badly burned and are indeed poorer. They will spend less in the stores in the months ahead.

Unemployment could rise soon, as the Census Bureau fires the 500,000 temporary enumerators needed to complete the 2000 census. Inflation appears to be under control. In fact, the most recent report actually showed deflation, not inflation. Cynics may suggest that the Federal Reserve, dominated by Republican appointees, is doing its best to derail Clinton-Gore prosperity just in time for the election. I don’t believe this, but who knows?

VICTOR NYBERG

Vista

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Critics say the Fed’s move hurts consumers and small business. I agree. But, the same way small businesses can be singled out from the general pool of businesses as being more adversely affected by the Fed’s move, so too should a specific group of consumers be singled out.

Consumers who are on a lower, fixed income and who have to borrow simply to make ends meet will certainly be more adversely affected by higher interest rates than wealthy consumers, like the ones profiled in another May 17 article, who are able to buy third and fourth houses with cash. The Fed’s move will contribute toward the increasing gap between the wealthy and the poor in our society, and despite the boom of dot-com millionaires, this still is or at least should be a cause for concern.

MARIO LARA

West Covina

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Re “Liberals Rage at the Maker of Jobs,” by Matthew Miller, Commentary, May 17: What “liberals”? Who “raged”? Your front-page article about the interest rate hike identified two critics, a Democratic senator and “the chief economist for the U.S. Chamber of Commerce.” Miller named no “liberals” at all, preferring to use the label where we would expect to see the name of a real person.

It’s early in the political season, but the right-wing urge to attack is already stronger than its willingness to check facts.

CHRISTOPHER PLOURDE

Venice