Tom Harkin: “I want to cover, however, just briefly, for the record, the issue of NAIRU. I said earlier today I was going to get into…”

“I want to cover, however, just briefly, for the record, the issue of NAIRU. I said earlier today I was going to get into that, and I want to talk about NAIRU, the nonaccelerating inflation rate of unemployment, and what it is and why it seems to have such a hold on us. So what is NAIRU? Let me just read some comments, and I will get into NAIRU for a few minutes. Dana Mead, the chief executive of Tenneco and chairman of the National Association of Manufacturers, had it right when he said that "NAIRU is to economics what the Nehru jacket is to fashion--outdated." Robert Eisner, professor emeritus at Northwest University, whom I quoted earlier today several times, argues that one can actually reduce inflation by keeping unemployment under its natural rate. He developed this argument in an article entitled "Our NAIRU Limit." That was in the American Prospect magazine, spring of 1995. I thought I would quote a little of it to talk about NAIRU and what it is. First of all, Mr. Eisner says, starting his article: We mustn't have it too good. Too much growth--too little unemployment--is a bad thing.…”