lan Greenspan is expected to retire next year. The Bush administration, because of its nature, will have a hard time finding a successor.Posted on 01/25/2005 8:11:22 AM PST by liberallarry
lan Greenspan is expected to retire next year. The Bush administration, because of its nature, will have a hard time finding a successor.
One Fed chairman famously described his job as being to "take away the punch bowl just when the party gets going." Bond and currency markets want monetary policy in the hands of someone who will say no to politicians. When a country's central banker is suspected of having insufficient spine, the result is higher interest rates and a weaker currency.
Today it's even more crucial than usual that the Fed chairman have the markets' trust. The United States is running record budget and trade deficits, and the foreigners we depend on to cover those deficits are losing faith. According to yesterday's Financial Times, central banks around the world have already started shifting into euros. If Mr. Greenspan is replaced with someone who looks like a partisan hack, capital will rush to the exits, the dollar will plunge, and interest rates will soar.
Yet President Bush, as you may have noticed, only appoints yes-men (or yes-women). This is most obvious on the national security front, but it's equally true with regard to economic policy. The current Treasury secretary has no obvious qualifications other than loyalty. The new head of the National Economic Council apparently got the job because he is a Bush classmate and fund-raiser.
Of course, Mr. Greenspan himself has become a Bush yes-man. The chairman acted as a stern father figure, demanding fiscal rectitude, when Democrats held the White House. But he turned into an indulgent uncle when Mr. Bush took office. First, he urged Congress to cut taxes in order, he said, to prevent an excessively large budget surplus. Then, when surpluses were replaced by huge deficits, he supported a highly irresponsible second round of tax cuts.
Nonetheless, Mr. Greenspan retains considerable credibility with the markets. Who else can satisfy both Mr. Bush and foreign investors?
For a while, the presumed front-runner to succeed Mr. Greenspan was Martin Feldstein of Harvard. Mr. Feldstein, like Mr. Greenspan, has a reputation built over a long, distinguished career. Also like Mr. Greenspan, he is a former crusader for fiscal responsibility who became an apologist for budget deficits once Mr. Bush took office.
I've known Mr. Feldstein a long time, and worked for him at Ronald Reagan's Council of Economic Advisers. He used to be a deficit hawk; now, out of what may be sincere conviction but looks from the outside like an effort to demonstrate political loyalty, he endorses tax cuts in the face of large budget gaps and gigantic borrowing to privatize Social Security.
But it's reportedly not enough, because right-wingers have never forgiven Mr. Feldstein for his finest hour - the time when, as a member of the Reagan administration, he spoke out against deficits. It's not just vindictiveness on their part: a man who once took a stand on principle while holding office might do so again once ensconced at the Fed.
Glenn Hubbard of Columbia, who served in the administrations of both Bushes, is also frequently mentioned. He's a smart economist, but everything in his policy career suggests that when the party really got going, he would say: "More punch? Yes, sir, whatever you want."
The last name one often hears is Ben Bernanke, currently a member of the Fed's Board of Governors. (Before going to the Fed, Mr. Bernanke was chairman of the Princeton economics department, where I'm on the faculty.) If Mr. Bernanke were appointed directly from his current Fed position to the chairmanship, there would be general acclaim. But he may soon move to the Council of Economic Advisers. Why?
Surely it's not because this administration, with its disdain for technical expertise in all fields, wants his advice. I hope I'm wrong, but my guess is that what's intended for Mr. Bernanke is a form of hazing: he will be expected to prove his loyalty by defending the indefensible and saying things he knows aren't true.
That might seem a tolerable price to pay for the Fed chairmanship - but a year of it might well make Mr. Bernanke damaged goods from the point of view of the markets.
It's a dilemma. I don't have any sympathy for the administration's perplexity. But I do wish Mr. Bernanke the best of luck, and hope he knows what he's doing.
The big problem with the Fed is they insist on manipulating interest rates instead of letting the market set them and pegging money supply to the growth of the GDP.
Are you suggesting Krugman still has some reputation or acumen to lose? :-)
Just like Y2K. We're all gonna die!!
Exactly.
Krugman thinks he's sized up Bush as the worst President in American history, the man who precipitated both a disasterous war and a disasterous depression and caused the United States to lose its leading position in the world politically, financially, morally, militarily.
Despite the caveats in the article (de rigeur in economics and politics) that's one hell of a prediction. If Krugman is right he goes down in history as courageous and prescient. If not he's just another partisan hack belonging to the same club as the guys with beards and robes who've been saying the world would end for more than 2000 years.
All I want to know is how much the wife, Andrea Mitchell, has made in the Market since she married Greenspan?
Ask her.
And you're wrong about Greenspan. He's quite the musician, a respectable athlete, and a wit(privately. not at senate hearings).
It's doubtful, I should think, that she would profit from insider information, even if Greenspan would provide it to her. I do not recall that his integrity has ever been called into question. And "voluntary" compliance would not be needed is she were indicted.
As for next Fed chairman, I would suggest Arthur Laffer.
BTW is it not against the rules to post an entire article from the NYTimes?
It's doubtful, I should think, that she would profit from insider information, even if Greenspan would provide it to her. I do not recall that his integrity has ever been called into question. And "voluntary" compliance would not be needed is she were indicted.
As for next Fed chairman, I would suggest Arthur Laffer.
BTW is it not against the rules to post an entire article from the NYTimes?
She's 59, he's 78. They were married in 1997. They share many interests and are both high achievers. Seems normal to me - even admirable.
She's 59, he's 78. They were married in 1997. They share many interests and are both high achievers. Seems normal to me - even admirable.
Nope. The LATimes and the WaPo and their affiliates, associates, fellow travelers, bed mates, etc. must be excerpted...but the NYTimes is reasonable.
oh yeaaaa right! LOL
nothing like marrying your father! LMAO
and if ol' Greenspam was a retired regular Joe pushing eighty years old, ol' Andrea would have jumped on him like white on rice...
And I've got some swamp land in FL for sale if you're interested?
So you advocate a limit on age differential? People should not marry if they are more than 6 years apart? LOL
He's not a normal guy. He's exceptional (that's why he got rich) and women appreciate that. Too bad, bud, but that's how the world works.
Liberals, you may have noticed, presume that there are only people who agree with them - and fools. They get that way by believing their own press clippings, and they get good press clippings by toadying up to journalists (and in the case of journalists, by writing good press clippings for each other - by calling each other "objective").President Bush is the president. If things go wrong on the foreign policy front, it is the president who is responsible. Likewise if things go well on the foreign policy front - if for example Afghanistan holds successful elections - the president is responsible. Liberals however fantasize that, because Bush is not a liberal he is not wise, and therefore nothing good can possibly come of Mr. Bush's policies.
Liberals underestimate what can prudently be accomplished by a well-disciplined and equipped military, and they (ironically, since the principle of government authority is the same in both instances) overestimate what can be done by setting high tax rates.
The limits of what the military can do are very real; it can kill but not ressurect and can destroy far more expeditiously than it can build. But the liberal who sees that limitation clearly is blind to the limitation of government power over the choices of Americans - over the economy of the nation. High tax rates can reduce and even destroy commerce, and liberals' blinkered view of incentives causes them to grossly underestimate that tendency.
Although liberals fantasize that profit is unnecessary, profit is the cost of good management - and good management is far cheaper than its absence. "Liberal" high taxes reduce the profit in commerce, and that tends to reduce commerce far more strongly than the liberal is prepared to believe.
This writer is a liberal (code for "wise in his own conceit"), and assumes that his opinion is better than a conservative person's considered opinion. Hence, that someone who doesn't sabbotage Bush's policy is a "yes-man." Liberals are all yes-men. Than which there could be few better examples than the members of the x42 administration who just followed orders and spread x42's lies the the rest of the world and didn't resign when they found out that they had been lied to.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.