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Lay off, Fed: Robinson
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August 22, 2000: 1:27 p.m. ET
Former American Express CEO still says inflation should not be a concern
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NEW YORK (CNNfn) - Talk about visionary. Six years ago, James D. Robinson, III, former chief executive of American Express Co., predicted that the U.S. economy could grow at a rate of five to six percent without inflation. That sounded pretty far-fetched at the time, but in 2000 it's a fact of life.
 Robinson appeared Tuesday on CNNfn's "Market Call" program to buck a little more conventional wisdom. This time his target was the Federal Reserve.
Robinson, now chairman and CEO of venture-capital firm RRE Ventures, said Fed Chairman Alan Greenspan and economists who fear inflation will be the result of rapid U.S. economy growth are missing the point. He said the twin towers of open global markets and rapidly improving technology make inflation a moot point.
"Both of these have done one very simple thing -- (they have) created competition," Robinson said. "With competition businesses can't raise prices. And if nobody raises prices there is no inflation."
Robinson said continuing interest-rate hikes by the Fed, combined with rising energy prices, will increase the cost of doing business and have the opposite of the Fed's intended effect. (439K WAV) or (439K AIF)
He also believes the trend of global competition and increased productivity driven by technological change is only in its infancy. (434K WAV) or (434K AIF)
Robinson served as the CEO of American Express (AXP: Research, Estimates) for 16 years. He resigned under pressure from the company's board of directors and shareholders, who were unhappy with the company's profitability.
New York-based RRE Ventures has invested in more than 30 companies and has more than $330 million under management. Robinson is also chairman of Violy Byorum & Partners Holdings, an investment firm specializing in Latin America. 
-- compiled by staff writer Mark Gongloff
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RRE Ventures
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