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To: Skeeter Bug who wrote (129223)	7/27/2001 12:41:48 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

1.] Greenspan's fault may be that he is too political and like everyone else has an ego. Greenspan wasn't the one who created the theory that communications and computing technology was increasing productivity by leaps and bounds. I believe that there has been some real improvement in productivity brought on by the adoption of communications technology etc. but obviously a lot of the numbers used to justify the continued expansion of the economy without inflation was due to a false measure of the service economy. For example, how much productivity was added by all the failing dot coms that soaked up a huge amount of intellectual and capital resources? Unless you love hand puppets, not much! 2.] & 3.] From the mega economic perspective, there is a world-wide economic expansion taking place and, therefore, a need for increased capital. The economy is somewhat like a house of cards or, another analogy, a growing organic life form that must be fed to keep it growing. We could go back to strict monetary conservatism and restrict capital markets to prevent all speculation but that would cause the patient to die. I think that the FED needs to keep capital markets liquid but within a level that does not overly stimulate excessive speculation. How do you know when there is excessive speculation? I think it's when the average experienced business person (not a 20's something Internet wonder kid), can study the average business plan and reasonably come to the conclusion that it makes sense that capital invested will be rewarded. I read business plans of Internet companies that were funded by hundreds of millions that had only vague projections about how they would generate sales to a significant degree. They got funded because investors were gambling not investing. Now they are bust. What I am saying is that Greenspan is too easy a target and is not the real problem. If there had been another FED chairman in his place over the last several years I doubt the economy would look much different. Other major macro economic events have fueled worldwide economic expansion, and subsequent needs for capital expansion that override domestic policy to a large extent. No FED chairman would have stood in the way of "progress".