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To: Bill Holtzman who wrote (6489)	2/19/2000 11:15:00 AM
From: jmanvegas	Read Replies (1) \| Respond to of 24042

Greenspan happened to be the Fed Chairman at the right time in history. This all began with Reaganomics and the explosion in technology and with that permanent and fundamental changes in the economy and productivity. Sure Greenspan has engineered some good moves, but you make him out like he's some god. He's an excellent economist but he is not infallible. I'm sure there are many others who can do his job. Kudos should also be given to former Treasury Secretary Robert Rubin. When he left, things didn't go to hell in a basket. If Greenspan left tomorrow, things would just move ahead anyway. The markets are bigger than anyone, any institution, or any government, and they will take care of themselves. The markets are self-regulating. If Greenspan is targeting the markets and the wealth effect, he is stepping overboard IMO. That is not in his job description nor is it the function of the Fed. Greenspan also has the graybeards on the Fed board to deal with so he has to become a mediator between the hawks vs. the doves on that board. All that being said, I respect Greenspan but I think Larry Kudlow would make a great Fed Chairman. We could always use some new blood and vitality in government agencies. jmanvegas

To: Bill Holtzman who wrote (6489)	2/19/2000 11:24:00 AM
From: red jinn	Read Replies (2) \| Respond to of 24042

bill: you wrote: <<Enough already of the Larry Kudlow kudos. Anybody who can start off their column with a preachy comment like "Be careful what you wish for, Mr. Greenspan" directed at one of the greatest economists in history is a pompous ass. I saw no need to read further. If Greenspan were a regular guy he'd tell that little creep to take a leap. People who want to preach at Greenspan should try teaching Michael Jordan how to shoot a jumper.>> that's a good ad hominem attack, but i didn't see one word of analysis in response to cyrus' well-reasoned (imo) statements. greenspan made his reputation as an economist as a monetarist. he's now preaching against an economy i don't think he really understands. to be fair, i think few people understand it, but he's raising interest rates b/c he's never seen an economy grow this fast this long and he's nervous. fair enough, but cyrus is right to raise the policy and practical effects of this. so far, i say round 1 to cyrus. best, red jinn

To: Bill Holtzman who wrote (6489)	2/19/2000 11:38:00 AM
From: Lee	Read Replies (2) \| Respond to of 24042

Hi Bill,..Re:.Enough already of the Larry Kudlow kudos. Maybe it's forgotten that economists such as Kudlow have an agenda, principally to sell copy. <g> Two years ago when Kudlow had a different job, he was proposing to anyone who would listen that Greenspan should be awarded the Nobel prize for Economics. So now wouldn't it stand to reason that liberal interpretation of Greenspan's remarks slanted to one's current agenda would be offered to advance same? <g> For the record. Kudlow - "Never a mention about the pro-investment benefits of rising productivity and stock market wealth." Greenspan - "Without doubt, the synergies of the microprocessor, laser, fiber-optic glass, and satellite technologies have brought quantum advances in information availability. These advances, in turn, have dramatically decreased business operational uncertainties and risk premiums and, thereby, have engendered major cost reductions and productivity advances. There seems little question that further major advances lie ahead. What is uncertain is the future pace of the application of these innovations, because it is this pace that governs the rate of change in productivity and economic potential." bog.frb.fed.us Also Greenspan - "With firms perceiving abundant profit opportunities in productivity-enhancing high-tech applications, investment in new equipment has been surging and could well continue to rise rapidly for some time. Moreover, expectations that the investment in new technologies will generate high returns have been lifting the stock market and, in turn, helping to maintain consumer spending at a pace in excess of the current growth of real disposable income. " bog.frb.fed.us Kudlow - "If unemployment drops too far, or growth increases too much, then inflation is sure to follow according to the Fed view. It's the old Phillips-curve thinking dressed up in new clothes." Greenspan - "However, an already tight domestic labor market has tightened still further in recent months, and bidding for workers, together with further increases in health insurance costs that appear to be coming, seems likely to keep nominal hourly compensation costs moving up at a relatively brisk pace. To date, the increases in compensation have not had serious inflationary consequences because they have been offset by the advances in labor productivity, which have held unit labor costs in check. But the pool of available workers cannot continue to shrink without at some point touching off cost pressures that even a favorable productivity trend might not be able to counter." Kudlow - "But Greenspan never once mentioned money, or excess money, in his testimony. " Alan - "Given continued uncertainty about movements in the velocities of M2 and M3 (the ratios of nominal GDP to the aggregates), the Committee still has little confidence that money growth within any particular range selected for the year would be associated with the economic performance it expected or desired. Nonetheless, the Committee believes that money growth has some value as an economic indicator, and it will continue to monitor the monetary aggregates among a wide variety of economic and financial data to inform its policy deliberations. " Kudlow - "The Fed itself suggests that perhaps the answer is now 3.5 percent." Greenspan - "The central tendency of the FOMC participants' forecasts of real GDP growth from the fourth quarter of 1999 to the fourth quarter of 2000 is 3-1/2 percent to 3-3/4 percent." Kudlow - "In a strange new twist, Greenspan now argues that productivity advances are actually inflationary. Talk about tortured logic! In this view, productivity is raising stock market prices. So the wealth effect then leads people to consume more, and this spending creates excess demand. Productivity and wealth gains are therefore inflationary!" Message 12917533 Greenspan - "However, the economic processes that are giving rise to faster productivity growth not only are lifting aggregate supply but also are influencing the growth of aggregate spending. With firms perceiving abundant profit opportunities in productivity-enhancing high-tech applications, investment in new equipment has been surging and could well continue to rise rapidly for some time. Moreover, expectations that the investment in new technologies will generate high returns have been lifting the stock market and, in turn, helping to maintain consumer spending at a pace in excess of the current growth of real disposable income. Impetus to demand from this source also could persist for a while longer, given the current high levels of consumer confidence and the likely lagged effects of the large increments to household wealth registered to date. The boost to aggregate demand from the marked pickup in productivity growth implies that the level of interest rates needed to align demand with potential supply may have increased substantially. Although the recent rise in interest rates may lead to some slowing of spending, aggregate demand may well continue to outpace gains in potential output over the near term, an imbalance that contains the seeds of rising inflationary and financial pressures that could undermine the expansion." Cheers, Lee