Last week's economic news affirmed Greenspan's new concern about deflation. Wholesale prices fell -1.9%, the sharpest monthly decline since the late 1940s. By comparison, the prior month had increased +1.5%. Capacity utilization fell to levels not seen since 1983, when we were coming out of a far deeper recession than this one. Industrial production declined by -0.5%.

Rumors are that we may have a tax plan by the end of the weekend. Meanwhile, additional pressure for a U.S. stimulus tax cut has been coming from, of all places, Europe and Asia, where there were complaints about the low value of the dollar. While those economies have done a poor job of stimulating their own national economies, the fact that the U.S. economic engine is capable of jump starting their economies is not lost on anyone-except, apparently, Congress, who finally sent two quite different bills to conference committee and fought the details out there. Like Bismarck said, the two things people should not watch being made are sausage and law.

Our trade partners were pressing for action as recent currency movements to a lower dollar and an appreciating Euro have drawn great concern.