bill:
first, sorry i didn't notice that kudlow wrote the piece. in hasty surfing, i saw the reference to kudlow but assumed cyrus expanded/explicated, etc.
but my point about greenspan (or anyone you care to name) is that no individual (or computer network) can "know enough" not to do harm. the market is too vast, always was and always will be. paul volker(sp?), who was greenspan's predecessor, faced the same problem, and, if anything, greenspan is just continuing volker's policies more or less. i don't doubt for a moment greenspan's credibility, knowledge, etc. frankly, i think clinton reappointed him just for his reputation instead of naming somebody like larry summers b/c he (clinton) was worried about what the market wd do with someone other than alan. but it really is reading "financial tea leaves" if you think you can know what's going to happen in the market and you can guide it through interest rate policies.
i think it's ironic that greenspan, who (i believe) started out as a disciple of ayn rand), now thinks he can control the economy. he can't. he can raise and lower the price of money, but he has no control over tax and other fiscal policy, which are at least important, if not more, as factors than the federal funds rate. frankly, i think the mini recession we had in 91/92 was due to bush's lapse on his tax promises and congress's enactment of higher taxes. it had nothing to do w/ interest rates, and i'd bet that greenspan wd agree w/ me, altho we won't know till he writes his memoirs.
you criticize the republican congress. thank heaven they had the sense to limit clinton's tax increases and other excesses. if they also had the gumption to lower the capital gains rate, you would really see an increase in the budget surplus and probably even more growth b/c the cost of taking a risk wd have decreased.
you also say it's naive and arrogant for me (i know you don't mean it personally) to question his policies. i can think of at least 3 nobel prize winners: hayek, friedman, and stigler (and there are plenty of other economists) whom i've read and studies who wd tend to agree w/ kudlow rather than greenspan. after reading friedman and anna schwartz's "history of money in the united states," it's hard to diagree w/ one of their conclusions, namely, that more harm was probably done by monetary regulators attempting to do good than is realized. of course, in the present context, harm can also be growing less fast than otherwise.
which leads to my final point: reasonable men can differ but you still haven't rebutted kudlow's points, other than to say than since the economy is doing well, the putative cause must be the guy who determines interest rates. that's post hoc, propter hoc argument and is just as naive/arrogant as the attitude you link to me/cyrus/kudlow.
best regards: red jinn |
