From the editor Featured

10:00am EDT July 22, 2002

If you're at all like me, you avoid articles that go into detailed discussion of the money supply and other macro-economic issues. The Fed may as well be the moon, and the trade balance hits as close to my home as a sunburn in February.

My concern about economics is strictly micro. While book knowledge tells me how a quarter-percent cut in the prime interest rate sends an important signal to people who borrow money 12 figures at a time, it doesn't do anything to cool the burn of my Visa card.

You might think that a business editor would have more concern than this about the declining value of the yen. And yet, I have to admit that I've never actually seen or held a yen. (Although I have held 30,000 or so pesos, which was kind of exciting until I inquired about the cost of a couple of cervezas.)

Anyway, economic doomsayers have been talking about the Asian monetary crisis for a little over a year now, and aside from a few burps and hiccups, there haven't been any indications that it's slowing down business in Northeast Ohio.

Despite the wild swings of the various Wall Street averages, the U.S. economy seems to be doing just fine. In the last 12 months, we've seen gas prices lower than they've ever been since I've owned a car. The interest rate on my recently refinanced mortgage is so low that the bank is almost paying me.

Which, I understand, is precisely the problem in Japan and all the other troubled economies of the Pacific Rim, where deflation has created a crisis for the world. And it leads me to ask: So what's the problem? For the first time in my life, computer hardware isn't the only thing going down in price. That oughta be a good thing.

But it's not, and we are not quite as isolated here in Northeast Ohio as you might think.

That's the point of our special focus on deflation, which you'll find on page . The articles were researched and written by our Washington correspondent William Hoffman and Cleveland Associate Editor Dustin Klein-the same team that last year produced our highly readable and award-winning examination of electric deregulation.

It seems to be a specialty when they collaborate: a subject that is technical and, potentially, devastatingly dull suddenly becomes entertaining, concise and useful.

The upshot of their work this time around is, that while the risk of widespread economic meltdown seems remote, Asia's deflation is already a drag on our economy. The business owner who understands why can protect against a worsening of the economy, and in some cases, perhaps even benefit from it.

That's my roundabout way of making a very serious recommendation that when you see the word "deflation" as you wade through this month's issue, don't dismiss it as remote and technical mumbo-jumbo from people who only do business in theory.

This is real stuff, and if you want to understand how the issue affects you, this is probably the only article you need to read on the subject.

Bob Rosenbaum can be reached at (216) 529-8584, or by e-mail at brosenbaum@sbnnet.com.