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Politics : Formerly About Advanced Micro Devices
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To: Scumbria who wrote (112568)5/24/2000 11:09:00 PM
From: Jim McMannis  Read Replies (2) of 1575173
 
RE:"I'm surprised that so many free-market types are tolerant of Greenspan's meddling"

It's the FEDs job to meddle. Basically they are Keynesian economists vis a vie capitalists. Their job is to keep the economy away from runaway inflation by raising rates and stimulate it during slow periods by lowering rates and providing liquidity. The stock market, unlike what wall street would like you believe is ancillary to this. That is run mainly on fear and greed...emotion.
Moderating inflation before it runs away is far more desirable than trying to hack it after it has run away.
Also makes recessions milder and more avoidable.
Mind you, all of this is not an exact science. Much of the time it's like swimming in the dark, because the effects are not immediate so it's like trying to hit a moving target a mile off with a bow and arrow.
AG has made mistakes, he hiked to much in '87 and crashed the markets. That's why he has become an incrementalist. This time I think he has gotten behind the curve and a few 1/2 point hikes are going to be needed to slow the economy down. The market will gyrate. The last call to get on the train will occur when the last interest rate is anticipated to be coming or is in. This last happened in November '94 after 6 hikes over nearly 1 year.

Jim
Jim
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