We can thank bubblevision and the Maestro himself for a splendid reminder today that Greenspanian central banking is the greatest menace to capitalist prosperity ever invented. This was made abundantly clear by his pronouncement on CNBC regarding the current labor market:
“Tightest labor market I’ve ever seen.” – Greenspan on
As an empirical matter, of course, that’s rank nonsense—and is among the stupidest quips the Maestro has ever uttered. That’s because the law of supply and demand dictates that if the labor market is actually the tightest since Greenspan began his career in the 1950s, wage rates should also be rising at the highest rate ever.
In fact, at 2.8% year-year-0ver year for September 2018, nominal wage growth (red line) is the lowest it’s been since the late 1960s; and in real terms, the story is even worse.
To wit, between 1955 and 2000, real compensation per hour grew at a 1.75% annual rate—-and that’s the average across seven business cycle, including recession years.