Q: What's going on with inflation and recession right now? Are we in a recession? Are we experiencing inflation?

A: We're experiencing a slow-down but I'm not sure we're going to meet the definition of recession by an economist's standards, which is two quarters of negative growth. [Today] we will get the first-quarter GDP [gross domestic product]. I think we're going to end up with a flat number. In the second quarter, we may see a rise.

One of the real key elements is that inflation seems to be getting a little bit higher than it has in the past. The Fed is less vigilant on that than it has been in the past. They are afraid the economy is going to slow substantially, so they are feeding money into the system.

Q: Do people's salaries typically reflect what's going

on in the economy?

A: That's what eventually should happen. We haven't seen that in a while, though, especially for the middle class. We might see that pressure. I think the Fed has to worry about this rise in oil and food prices feeding over into the rest of the economy. People are demanding higher wages so they can meet their costs. No one wants to have a lower cost of living.

Q: Do you think the $600 government rebates will make a difference in the economy?

A: I think they'll make a slight difference. It depends on how much people actually spend. If most people pay down their credit-card debt, that will be a big drain on that and make it less effective. It will have some effect, but not as much as the administration or Congress would have you believe. You have to realize that almost everything is psychological. You have a quarter where you watch the news and the world is coming to an end.

You think, "I don't need to buy a car or update my house right now because I may not have a job tomorrow." The stimulus package is aimed at changing that psychology by providing extra funds to those people. Pundits make economic numbers sound worse than they are . . . We live in a really weird world where we have 24-hour business news, so everything's a boom or a bust.

Q: What areas in the economy are seeing the biggest price increases, and why?

A: Food and fuel. Energy prices are as high as they are because countries like China and India, their demands are increasing at a tremendous pace. Still, I think oil prices are higher than they should be, given the supply and demand . . . Food has a lot to do with government policy.

We've taken a lot of acres out of other commodities to plant corn to put in our cars. People took wheat acres out to put it in corn. We used to be the wheat basket of the world, now we're not, so the price has gone up.

Q: Will a change in Washington next year have any effect on the economy?

A: Not in the short run, to be honest with you. Here's an analogy: If you have a supertanker going in one direction and you try to stop and turn, you can't do it quickly. To change the momentum takes a lot. We're not a speedboat in the economy; we're a supertanker.

Q: Will things get better?

A: I'm an optimistic person. At heart, I believe in the system we're in. I believe it's a self-correcting system, and I believe in the long run it's efficient. I just wish the government would stay out of it more.