'Road to Recession': Readers diagnosed and prescribed cures for what ails the nation's economy. "The only thing missing from your eerie, depressing cover photo of a desolate highway was the road sign GEORGE W. BUSH WAS HERE," one wrote. Many said tax-rebate checks aren't a solution. "The correct stimulus package is to inject funds into the banking sector to rebuild liquidity and sustain long-term growth," one noted. Another warned, "What will work is to bring expenditures back in line with income. Current spending plus any stimulus will only accelerate inflation."
On 'The Chemicals Within': "The scientific understanding of the physical effects of synthetic chemicals in human blood and urine is almost certainly incomplete and unclear, so there is no consensus on whether or how such chemicals should be regulated."
Martha S. Head
Anxiety Over the Economy
Your reports in the Feb. 4 cover story, "Road to Recession," failed to focus on the real economy. Instead, NEWSWEEK has joined with the current and past administrations in gauging the health of the U.S. economy by the well-being of speculative traders on Wall Street, proposing "fixes" whose main purpose is to bail them out. What this tactic ignores is that the real purpose of stocks is to invest funds in return for a share of profits in the form of dividends, just as the real purpose of buying a home is to live in it. What has happened now is that Wall Street has securitized the mortgages and relied on a pyramid scheme of trading stocks for capital gains, with the hope that the bubble wouldn't burst when the music stopped. Home buyers were induced to participate in the same excesses. The fix? Bail these folks out, but don't bother with extended employment benefits or food stamps. As both John McCain and John Edwards have pointed out, special interests have long ago taken over the agenda of our nation, to the detriment of the vast majority of Americans.
Benjamin C. Riggs Jr.
In "The Market's Echo Chamber," Robert Samuelson bemoans the financial populism of Jim Cramer and "hordes" of economists and Wall Streeters. I agree that the Fed should ideally focus on the next six years, not the next six months. But the Fed has to deal with the current reality, whether or not created by past Fed policy—and the current reality is dire. If we can't reduce homeowner refinancing rates, if we can't return the banking sector to profitability, if we can't reduce credit market risk spreads, if we can't save the bond-insurance industry, then what is the point of taking a six-year view? With the latest 50-basis-point cut, the Fed is finally dealing with the deflationary crisis we have, rather than the inflationary world the academics fear. If this is financial populism, then count me, along with Cramer, as a populist.
Robert Samuelson writes that the high inflation of the 1970s and '80s followed the relaxed money and credit of the previous period. We didn't have inflation then; we had stagflation caused by the increase in the cost of oil, followed quickly by other increases in the cost of living, as Big Labor got cost-of-living raises as its raises pushed up the cost of living. The only ones who could afford to buy automobiles, washing machines, etc., were the union workers. The Fed is surely partly responsible for the present problem because it set interest rates too low, possibly to make President Bush's tax cuts look good. The resulting competition to loan money led to the present problem.
Scotts Valley, Calif.
The executives of health-insurance companies earn millions of dollars in salaries (UnitedHealthcare's former president received $1 billion before he was investigated). If there were some limit on these corporate salaries, there would be health-insurance funding for all Americans, including those uninsured.
Stephen M. Kreitzer, M.D.
Age and the Presidency
I am not sure if I can answer Anna Quindlen's question about presidential candidates, "How Old Is Too Old?" (Feb. 4). However, I can state what is of timeless value—John McCain's honesty, courage, compassion and willingness to take an unpopular stand if need be to achieve national security, economic stability and open diplomacy. Such attributes never age.
Chemical Additives Examined
It should be noted that most of the chemical additives addressed in "The Chemicals Within" (Feb. 4) have already been banned by the European Union, based on its own studies showing the products to be unsafe. The FDA and the EPA issue statements saying that no studies prove a connection between the chemical additives and disease, or state that more research is required. The statements do not say that there are EU studies showing such a causal connection, but that the United States fails and refuses to recognize the EU studies or fund research to determine the accuracy of those studies. I no longer believe that the FDA and EPA are the global "gold standard" for public safety, and I have little confidence that public safety is placed above corporate interests. Until these "grandfathered" chemical additives are proved safe, the United States should adopt the EU standards and ban their use. For my household, with one toddler and a baby on the way, I buy products that meet EU standards whenever possible, though I have to shop online, and pay more.
While "The Chemicals Within" sounded an appropriate cautionary note on human exposure to common chemicals, it certainly could have benefited by being vetted by a chemist. The supposed formula for "phthalates" was instead for an organic phosphate, while the formulas for PBA and PBDE showed cyclohexane rings instead of the correct benzene rings.
E. Thomas Strom