[Congressional Record Volume 146, Number 24 (Tuesday, March 7, 2000)]
[Senate]
[Pages S1194-S1195]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FEDERAL RESERVE BOARD

  Mr. DORGAN. Mr. President, I came back from North Dakota on a late 
flight last evening on Northwest Airlines, flying North Dakota to 
Washington, DC. When one is traveling all day and up late, one gets up 
in the morning and it takes a while to adjust to find a good mood. My 
morning wasn't enhanced when I saw USA Today and saw the headline, once 
again, that Mr. Greenspan digs in his heels on rate hikes.
  Mr. Greenspan goes to Congress and decides he will tell the American 
people they should brace themselves, he will increase their taxes in 
the form of higher interest rates. That did not exactly make my day 
this morning.
  I will make a couple of comments about what Mr. Greenspan and the 
Federal Reserve Board are doing.
  March 7, Wall Street Journal:

       The U.S. work force was much more efficient in the fourth 
     quarter than initially thought, push labor costs sharply 
     lower.
       Nonfarm productivity grew at a 6.4% rate in the last three 
     months of 1999, the fastest pace in seven years and well 
     above the government's initial estimate of 5%, the Labor 
     Department said Tuesday. The increase caused the biggest 
     decline in unit labor costs in seven years--a drop of 2.5% 
     that was more than double the 1% reduction the government 
     estimated.
       The surge in productivity, which was in line with 
     expectations, generally would suggest that the risk of 
     inflation remains low despite feverish economic 
     growth. Because workers are producing more goods and 
     services per hour, employers can afford to pay higher 
     wages without having to pass on additional costs to 
     consumers.

  I wonder if Mr. Greenspan has seen this information, or does he just 
disregard it. It does not matter what the facts are. They are intent on 
increasing interest rates at the Federal Reserve Board.
  How about this. Mr. Greenspan says he fears demand is still too 
strong, even after reports last week that job growth has slowed in 
February, unemployment rose, and sales for new homes dropped sharply at 
the beginning of the year. He says our country is growing too fast and 
too many people are working, and so he has decided he wants, once 
again, to increase interest rates.
  What does increasing interest rates mean? I will tell you what it 
means. If he, as some expect, increases interest rates another full 1 
percent, which will double it from where rates were about a year ago, 
it means that every North Dakota farm family will pay about $1,500 more 
per year in interest costs. Typical nonfarm households in North Dakota 
will pay about $700 more a year in added costs.

[[Page S1195]]

  There will be no debate in this Chamber about this issue. This is the 
Federal Reserve Board saying: We are going to tax the American people 
with higher interest rates. Why? Because we decide we are going to do 
it.
  Who are they? I do this as a public service. These are the members of 
the Federal Reserve Board of Governors and the regional Federal Reserve 
Bank presidents. This is a chart showing who they are and from where 
they come. They all wear gray suits. They all come from the same area. 
They all think the same. I even put their salaries on the chart. I do 
this so we can put some faces to this public policy because they want 
to close their doors, make decisions about interest rates, and impose 
higher interest rates on every American at a time when it is 
unjustified.
  My children used to go through a book called ``Where's Waldo?'' At 
night they would lay on the bed and search through those large pages 
trying to find Waldo. My son especially always claimed to find Waldo 
even when he had not sighted Waldo. I think my son knows something that 
Mr. Greenspan knows. Mr. Greenspan has been searching for inflation 
forever, even as inflation has gone down, way down, and he continues to 
increase interest rates with no justification at all.
  Where is Waldo? Where is inflation, I say to Mr. Greenspan? Where is 
the justification for deciding that family farmers in desperate trouble 
already should pay about $750 a year more in interest charges under 
your current interest rate increases that have already been put into 
effect by you, and $1,500 a year total in additional interest charges 
if you do as many analysts expect and increase interest rates another 1 
percent over the coming year?
  Mr. Greenspan is a public servant. I admire him for his public 
service, but I profoundly disagree with that monetary policy. Perhaps 
he will discover what most Americans know: Productivity has increased 
dramatically, inflation is down, and this economy can least afford, in 
my judgment, the increased interest rates that Mr. Greenspan is now 
proposing.
  I had asked for time this morning to speak on another subject. I 
thought if I was coming to the floor, I should at least make a comment 
about what Mr. Greenspan is talking.
  I ask unanimous consent to speak on another subject under a separate 
heading.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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