Economic Growth

EQUITY OFFICE Properties Trust joins the growing chorus against granting Keystone Opportunity Improvement Zone status to any new Center City development sites. Our fellow commercial property owners, Center City residents, state and local elected officials of both parties, the School Reform Commission and educational community, several trade unions, leading columnists and editorial boards, and academics from this city's universities and beyond oppose this measure. We believe this is simply the wrong policy to achieve smart development and economic growth for Philadelphia.

Inflation is a greater threat now than it was six months ago, and economic growth will slow through 2006, according to a survey of 44 economists by the Federal Reserve Bank of Philadelphia. The economists' new inflation forecast for 2006 is 3.3 percent, a 0.4-percentage-point increase from the survey results in December. Inflation is expected to retreat to 2.6 percent in 2007. Economic growth, as measured by gross domestic product, is projected at 3 percent in 2007, compared with 3.5 percent this year.

The Federal Reserve decided yesterday to hold interest rates steady amid signs economic growth has slowed from a sizzling first-quarter pace. The announcement, which came at the end of a two-day meeting of the Fed's policy-making committee, had been widely expected and left the key federal funds rate - what commercial banks charge one another on short-term loans - at 5.5 percent. "It [the economy] ain't broken, so it shouldn't be fixed," said Robert Solow, professor emeritus of the Massachusetts Institute of Technology, after the Fed's decision.

The Bush administration warned yesterday that a "second-rate" educational system was threatening the nation's long-term economic growth and suggested longer school years, more homework and less television as possible remedies. The administration took the unusual step of highlighting education in the President's annual economic report. At the same time, it predicted that the recession would be "short and shallow" and end by midyear. The downturn will be followed by strong economic growth through the mid-1990s, the administration said.

President Bush yesterday nominated Alan Greenspan for a second four-year stint in the driver's seat of the U.S. economy as chairman of the Federal Reserve Board. Bush's action ended weeks of speculation in financial circles that he had delayed Greenspan's widely expected reappointment to pressure him into cutting interest rates further to spur the economy. Bush denied that, saying that Greenspan's job as head of the nation's central bank was never in jeopardy. "The respect that Alan Greenspan has around the world and in this country, particularly in financial marketplaces, is unparalleled," Bush said at a 6 p.m. White House news conference.

Fighting inflation should remain the international community's biggest economic goal despite the recession in several large industrial countries, a world banking organization said yesterday. The Bank for International Settlements, which acts as a central bank to the world's central banks, dismissed the Bush administration's call for major countries to lower interest rates to spark economic growth. The bank said that taming inflation was more important than acting hastily to overcome recession.

For too long, the African-American population has tended to separate economic independence from political enfranchisement. This has resulted in the continuing inefficiency in the application of the latent, but vast resources available to its population - toward a well-rounded and focused, yet quick, economic emancipation of the African-American population. There exists a need for a more concise definition of the path for economic growth for the African-American population. True, coherent efforts to integrate social and economic growth remain a dire necessity, if only because with growth comes self derivatives of economic independence.

Today's question: Will Saddam Hussein do for George Bush what Ayatollah Ruhollah Khomeini did for Jimmy Carter? Well, not exactly. After all, the Iraqi president has not seized American hostages or made the United States a target for scorn and ridicule. All he did was invade Kuwait. Unlike the ayatollah, Hussein has not created a daily reminder of apparent presidential impotence. On the other hand, consider some of the possible consequences of Iraq's invasion, as it becomes pretty clear why the White House won't be sending any candygrams to Baghdad.

President Bush and his aides scrambled yesterday to deflect a Federal Reserve study that said the rich vastly increased their share of the nation's wealth in the 1980s at the expense of just about everyone else. In a startling report, two Federal Reserve researchers found that, by 1989, the richest 1 percent of American households held 37 percent of the country's total private wealth. The richest 10 percent of the populace held 68 percent of the nation's total private assets - stocks, bonds, real estate, personal property, bank deposits and ownership of businesses.

W. W. Keen Butcher (Letter to the Editor, April 27) succinctly laid out the various capital projects proposed by the city - the convention center, the convention center hotel, the detention center, the trash-to-steam plant - and raised directly and by implication two important questions: How can we afford all this, and if we cannot, what are our priorities? All of us hope that the city's economic growth will increase to the point that income from new sources of real-estate and wage taxes will offset the need to raise taxes.