When this is all done and over people will look back upon Alan Greenspan and wonder what he did wrong. Bob Woodward has just put out a new book on him. I have it on order right now. Here is an interesting review excerpt on it and how Greenspan makes decisions based upon feelings in his stomach:
slate.msn.com
The weirdest moment in the book--and perhaps the closest Woodward comes to telling us what it is that makes Greenspan truly different and special--is a scene set in 1994. The details aren't important, but Greenspan must overcome a consensus among his colleagues to raise rates by half a point when the chairman thinks a quarter-point is enough. Most of the back and forth is, according to Woodward's source notes, drawn from FOMC meeting transcripts. Greenspan, who ultimately carries the day, at a crucial point goes all out making his case and says, "I am telling you I have a pain in the pit of my stomach." Woodward writes:
The pain in the stomach was a physical awareness Greenspan had experienced many times. He felt he had a deeper understanding of the issue--a whole body of knowledge in his head and a whole value system--than he was capable of stating at that moment. If he was about to say something that wasn't right, he would feel it before he was intellectually aware of the problem. It was this physical feeling, this sense in the stomach, that he believed kept him from making dangerous or absurd statements that might appear on the front page of the newspapers. At times, he found his body sensed danger before his head. As he walked down the street there would be an approaching car, and his body knew to stay out of its way before his head.
Am I the only person who finds that passage startling? I've been conditioned all these years to think of Greenspan as the cautious and unfailingly logical man whose superior command and understanding of economic data is the key to his brilliant decision-making. And now it turns out that, what, he has a trick knee? He's magic? His friend Harvey peeks around corners for him? And since Greenspan himself is the only conceivable source for this passage, are we to conclude that the chairman simply believes his own hunches trump all comers? |
