Hi areyoukidding, True, what I wrote is unfortunate as related to Greenspan. I in fact picked up on the political story telling bit. Coming back to Greenspan, I think his competence as an economist is undoubtedly more convincingly supported by his earlier writings than by his term in public office. After all, even the devil would not be able to stop our foolish ride to the poorhouse.
It may seem a long time since Greenspan took the Fed Chair and I'm certainly only interested in the present and future but long long before that Wall St and others used to put big weight on his pronouncements on the economy and interest rates. He was a big wheel before the Fed.
I think you guys give the Fed way too much credit for controling macro economic events. Could Greenspan really have prevented the tech bubble? From Caroline Baum's article "Why would a better economic environment cause investors to be more careless?'' asked Jim Glassman, senior U.S. economist at JPMorgan Chase & Co."A true Randian would have total trust in individual judgments.'' What a load of crap. Individuals are smart; people are stupid. If anything bad economic conditions would have kept the bubble smaller. The question is did Greenspan make the best of what he was given? Maybe, or maybe not.
It's an interesting study in human nature to observe the "bash the incumbant effect" as a scapegoat for what is presumably people's own shortcomings in life. It happens to every single President, Fed Chairman and public figure that controls some public policy making. It's pretty darn hard to make any credible case against the phenominal job that Greenspan has done. Yet, clearly people try, Funny stuff indeed!
I agree. Some of the worst screechers are the gold bugs. That standard isn't coming back any more than our youth is. People forget that these chairmen are bankers sitting atop the US banking system (maybe world banking system) and managing it along with the stated goals of US price stability, full employment.. . They're going to protect our banks no matter what. If something pushes them - they're going to push back like a carrier battle group and if you're trading or investing in the way - you better look out. I've had a 13% + mtg. and that wasn't any subprime loan either. Never had a second's doubt Volcker did the right thing. Any of you in or close to banking before the Y2K? I can remember at least as far back as 98, brutal compliance measures and timetables that came down on the banks from OCC and all the other supervisory agencies. Big national banks spent 100s of millions - HUGE balance sheet entries you'd see in th efinancials. That only fixed our banks though. So what's wrong with flooding the system then, or after the Asian melt, Russian default, or after 9/11? Try pulling that off with pouches of gold powder. In case you don't get it, the message is "We ain't going down over this pal."
That's why he is voted the best story teller since Walt Disney. Two stories by Greenspane stand out in my memory: 1. The wealth effect story in the late 90's. 2. The story of new mortgages (ARM IO etc) making the housing more affordable in 2004.
I didn't read the book, but, I read the interview. All I can say is that I have sometimes found that people need to be shocking and radical in order to attract attention (and sell books). Most of the time, Occam's Razor applies, no need to get radical with theories. Thanks again, Dave.
i certainly don't agree with batra, but his ideas are thought provoking. you are right, the sizzle is always easier to sell than the raw steak. surf