It is very easy to say "I would have done it better", but I've yet to see anyone of his critics to form a reasonable monetary policy, even in the hindsight. The ones that are here, could you formulate your hypothetical actions as Fed Chairmans during the past 10 years, starting with 1995. Personally, I do think that G has done a pretty good job containing the risks in this economy. We had the mildest recession possible. I would not even think of blaming the deficit on G, as him and Paul O'Neal clearly got fucked over the triggers in the tax cut bill.
http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=a4CvekRiYYdY http://moneycentral.msn.com/content/P131154.asp
In general, yapping about his shortcomings is pretty easy, as he had his shareof bad calls (not that Caroline has EVER been right on hers). However, as I said before, even on the hindsight, no alternative to his agressive monetary policy has been offered in either of the articles.
Well what are you looking for? It's a fact the the Fed has knee jerk reacted and swung too far in it's corrections, and then had to subsequently modify in the opposite direction casuing dire consequences to the economy, stock market, housing bubble, and now a possible housing bubble crash.
Granted. Yes, in attempts to correct one problem he created another, but you can't disagree that with all of the "problems" we had a pretty good sail for the past 14 years. Could you formulate a policy that would have been less prone to asset over-appreciation and at the same time would safeguard the economy from major swings? Keep in mind that there are very few tools in the Feds arsenal and G survived a number of administrations, each with their own distinct economic views.
. SouthAmerica: I donât agree with you. In my opinion, Paul Volcker was the best Fed Chairman of the last 4 decades. I have no doubt that in the long run history will rank the âlegendary Fed Chairmanâ Paul Volcker many notches above Alan Greenspan. . APismoClam: oh yeah. He sure knew how to engineer a soft landing. with a nuclear bomb. *********** SouthAmerica: He was a great Fed Chaiman. He had the balls to increase interest rate to kill the massive inflation that we had in the 1970's and early 1980's. That Inflation wave resulted from the financing of the Vietnam War. Go back and check the priime interest rate in the US around 1978 - 1982. Thanks to Paul Volcker - he did set the stage and the foundations for economic growth and prosperity in the US in the following decades. ****** Paul A. Volcker (born September 5, 1927), economist, is best-known as the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan (from August 1979 to August 1987). Educated at Princeton, Harvard and the London School of Economics, from 1969 to 1974 Mr. Volcker served as under-secretary of the Treasury for international monetary affairs. He played an important role in the decisions surrounding the US decision to suspend gold convertibility in 1971, which resulted in the collapse of the Bretton Woods system. In general he acted as a moderating influence on policy, advocating the pursuit of an international solution to monetary problems. After leaving the US Treasury, he became president of the New York Federal Reserve Bank from 1975 to 1979. Volcker's Fed is credited with ending the United States' inflation crisis of the early 1980s. They achieved this by constricting the money supply through a sharp increase in interest rates. By 1985, inflation was considerably lowered from 9 percent in 1980 to 3.2 percent in 1983. .
. SouthAmerica: Today The New York Times published an article â âBush Keeps Open Mind on Choice to Run Fed.â By Edmund L. Andrews. When I was reading that article I realized that the author forgot to mention one of the most important criteria when the Bush administration has to choose a new Fed Chairman late in 2005. The author forgot to mention the names of the people who will approve the nomination of a new Fed Chairman. He did not mention a word which names are in the list of favorite candidates to be the new US Fed Chairman â the list prepared by the President of the Central Bank of China, and the President of the Central Bank of Japan. The names of the people in that list are the names that are relevant today. These are the two people who set monetary policy in the US today â these are the 2 fellows that Alan Greenspan has to call every month before he decides what to do regarding interest rates in the United States. (He has to get their approval first.) The question is which guy has more influence in the decision? How they are going to decide? A 50 % - 50 % until they come to a final decision? Or the Chinese Central Banker has a 60 % - 40 % advantage of the Japanese Central Banker today? The other question that people should be raising today is: Can the rules be changed at the US Federal Reserve Bank to accommodate a new Chinese Fed Chairman? .
Greenspan - Best Story teller since Walt Disney This is why the Democrats put him in place and the Republicans kept him there. In fact "Story Telling" is what the "people" want these days from their politicians. Unfortunately, this ruinous delusion afflicting Europe for roughly the last 200 years has now firmly taken hold in the US as well. Till about 1950, a lot of common sense still prevailed with the US population having learned the hard way from the people having "voted with their feet" in coming to the US. Goosey, Goosey Gander Wither Dost Thou Wander? nononsense
Unlike other posters, I don't feel up to the task of handing out prizes for best Fed Chairman, but I will say this : I've found listening to Greenie's congressional testimonials over the radio is like attending a master class in economics. That man understands the interconnectedness in a modern economy like very few do. Most of his (intelligent) detractors are free marketers who criticize his liberal use of easy credit to steady rocky markets, warning that there will be hell to pay later for depreciating the dollar - there have been 'sound' money men in the US since the days of bimetallism. Whether currency depreciation is a fair price to pay for muting economic volaility is a deeper question more worthy of discussion than whether Volcker or Greenie should be #1. I think he was also quite fair in admitting that one unexpected legacy of the "greenspan put" was a systemic deflation in risk premiums across asset classes.
He is the sole reason we are able to trade and chat about nonsense on this site. I ask you, could you do a better job? What would you have done differently? He is not a daytrader, he is managing the biggest single economy in the free world. he is a brilliant man. you guys would be eating rocks for dinner without him.