from richard russell tonight
You want to know about Greenie? Here 'tis, read on -- Russell
The Madness of Sir Alan
"Alan Greenspan's most successful ruse has to been to make his speeches so dull that they mask the monumental gamble he is taking with the U.S. economy." Peter Eavis, Probing Alan Greenspan's Easy Money Madness
This has been his modus operandi for quite some time, and as for the gamble, that is obvious to anyone who is following economic events with an eye to the data behind the headlines. But I am not sure about what Peter Eavis then goes on to say.
"But the Fed chairman's testimony before Congress on Wednesday clearly indicates that he believes he has won that gamble."
It has nothing to do with belief, and everything to do with appearance.
He is trying to create the appearance of having won the battle, of creating the illusion of victory, that the field has been won by Sir Alan, so that if the war is lost, he can place the blame on someone else, and on some other organization.
He clearly pointed at the administration and the budget deficits as a potential scapegoat in this and several recent speeches. They will serve to carry the blame in Sir Alan's History of the Debt Creating Peoples, if some more convenient scapegoat such as al-Qaeda does not appear on the scene before the final curtain comes down on his Potemkin village economy.
The key to understanding Greenspan is to think of him not as an economist, as which he was always mediocre at best, but as a bureaucrat in a large bureaucracy, and in this he excels, and has the kind of power that comes with time-in-place. In this he is more like J. Edgar Hoover than Paul Volker.
Here is an anecdote from Pierre Rinfret, an economist and seasoned Republican who has known Sir Alan first as a colleague at Columbia, then as a fellow economic consultant on the Street, and as an associate in several presidential administrations.
"One of the absolute lies about him is that he retired from his consulting business a wealthy man. Absolutely and totally untrue. (His emphasis, not mine. Jesse).
When he closed down his economic consulting business to go on the Board of the Federal Reserve he did so because he had no clients left and the business was going under. We even went so far as to try and hire some of his former employees only to find out he had none for the 6 months prior to his closing. When he closed down he did not have a single client left on a retainer basis. His only source of income was his speech making. As a speaker he had to be the ultimate bore exceeded only by Paul McCracken about who Richard Nixon told me on many an occasion "When he talks MEDGO" meaning "my eyes doth glaze over".
"He had a horrible record on forecasting the American economy. He missed calling, in advance, every single recession in the entire postwar period with only one exception. He neither called recessions nor expansions for the very simple reason that he has never been one to stick his neck out. In American industry they don't pay consultants for Pablum or for saying what everybody else does!And that is what he has always served up; Pablum. The driving force that may push Greenspan more than anyone or himself realizes is that he graduated from the "Bronx High School of Science" and that his peers included one Henry Kissinger and other famous (infamous?) politicians of about his age. A classmate of his once said to me that Alan had to prove to them that he was as smart as they were!"
Can this really be how things happen, not with careful planning, forethought, and measured stewardship, but through old school connections, inertia, organizational politics, and serendipity? To anyone who has worked for any length of time in a large government or corporate organization, the answer is apparent.
Jesse |
