Greenspan, the `Free Agent,' Deals in Currency of His Own Words. ``Bernanke runs the Fed, but everybody's listening to Greenspan.''
Feb. 10 (Bloomberg) -- Alan Greenspan spent 18 years as Federal Reserve chairman guarding his words like gold. Now he is cashing in.
Greenspan, who quit the Fed Jan. 31, has earned tens of thousands of dollars this month talking privately with investors. He has at least one more paid appearance Feb. 22 with clients of ABN Amro Inc. in New York.
Nothing bars Greenspan from selling his opinions about the economy and interest rates, and supporters say the price he commands is a just reward for a longtime public servant who turns 80 next month. ``He's a free agent now,'' said Allan Meltzer, Fed historian at Carnegie Mellon University in Pittsburgh.
Government ethics advocates say he ought to be more discreet.
``Is it a little troubling? Yeah, just because his words do carry such enormous weight,'' said Celia Wexler, vice president for advocacy at Common Cause, a nonpartisan government watchdog group in Washington. ``I can't imagine a former president's words having more weight, and that does make the burden on him all the heavier.''
The currency of Greenspan's words probably will become less valuable. New Fed Chairman Ben Bernanke is scheduled to make his first public remarks about the economy and interest rates Feb. 15 in the central bank's semiannual report to Congress, giving investors clues to his own policy preferences and views on the economy.
Treasury Bills
Greenspan's Fed salary last year was $181,100. His annual net worth for the past three years has ranged from a low of $3.7 million to a high of $9.4 million, according to required filings with the government. His money was mostly in Treasury bills.
Greenspan's office in Washington declined to comment on his post-Fed activities. At a dinner Feb. 7, hosted and paid for by Lehman Brothers Holdings Inc., Greenspan suggested that short-term U.S. interest rates may need to rise further, a person briefed by a participant at the meeting said. Attendees included hedge-fund managers, and the remarks pushed yields on short-term Treasury securities higher.
The New York Post reported yesterday that Lehman paid Greenspan $250,000. Kerrie Cohen, a spokeswoman for Lehman in New York, declined to comment.
The Lehman dinner came after Greenspan appeared via teleconference to a forum of investors in Japan hosted by CLSA Ltd., the Asian investment banking unit arm of France's Credit Agricole SA, the Times of London reported. The paper said Greenspan was paid $120,000 for that appearance.
Consulting Firm
After leaving the Fed last week, Greenspan started a consulting firm in Washington called Greenspan Associates, specializing in economic analysis. In addition to giving lectures, he plans to write a book. Greenspan will also serve as an unpaid adviser to U.K. Chancellor of the Exchequer Gordon Brown on issues such as macro-economic stability and coping with global economic change.
A former colleague said Greenspan respects the boundaries of what he can and can't say.
``Alan cannot and will not speak about anything confidential,'' Federal Reserve Bank of Chicago President Michael Moskow told reporters yesterday after a speech in the city yesterday. ``He is free to speak about other topics. There's no legal restriction about doing that, and I'm sure he felt it was appropriate.''
Gripped by Scandal
The selling of Greenspan's views comes as Washington is gripped by corruption scandals and allegations, including the resignation of California Representative Randy ``Duke'' Cunningham after he admitted taking $2.4 million in bribes, the indictment on fundraising-abuse charges of former House Majority Leader Tom DeLay and lobbyist Jack Abramoff's guilty plea on charges of fraud and conspiring to corrupt public officials.
As a result, ``there's really heightened attention on these ethics issues and conflict-of-interest issues,'' said Larry Noble, executive director of the Washington-based Center for Responsive Politics. In Greenspan, ``you have a former public servant who has a tremendous amount of knowledge and expertise garnered from years of public service who's now turning around and selling it to people who can afford to pay of lot of money.''
Greenspan's appearance was ``troubling,'' said Tom Schlesinger, president of Financial Markets Center in Howardsville, Virginia.
Overshadowing Bernanke
``Nothing he does surprises me,'' said Senator Jim Bunning, a Kentucky Republican and longtime Greenspan critic. For the moment, at least, Greenspan has overshadowed his successor, Bunning said. ``Bernanke runs the Fed, but everybody's listening to Greenspan.''
Other lawmakers sided with the former chairman. ``I've got a great deal of confidence in Mr. Greenspan's integrity,'' said Senator Evan Bayh, an Indiana Democrat and potential candidate for president in 2008.
``He's no longer in government so he isn't subject to any restriction,'' said Senator Byron Dorgan, a North Dakota Democrat who has criticized Greenspan for giving a ``green light'' to President George W. Bush's tax cuts. ``But that seems like a huge amount of money to be paying a former Fed chairman.'' |
