"I offer another view of Mr. Greenspan: He warned of the insanity. Those of us who've seen it before knew well what he spoke of. His "irrational exuberance" comment was right on the money. He ran rates up, then ran 'em down. And very recently in testimony on the Hill he was no Pollyana; he stated the economy was less than healthy. I view the man as intellectually honest, doing what he deems best. Can we ask for more in a Fed Chairman?"
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leekramer...
Yes, he warned about irrational exuberance and that remark was right on the money, but he did nothing about it - therein lies the problem. Rather than heading off the bubble by raising margin requirements, rates, reserve requirements, or some other move, he instead did the exact opposite and fed the monster with easy money until it was so bloated it had to be killed. To day that he was intellectually honest is a bit of a stretch - either he was not, which allowed him to keep pumping up the monetary base, or he was incompetent.
I completely agree that he saw the ultimate end of the bubble coming - the minutes of past Fed meetings clearly shows that they discussed it often and many economists and others had been warning for several years about what was sure to happen. But he did not have the courage to do what had to be done until it was too late and we are now paying the price for his lack or courage (or in my opinion, his ego) and will be paying for it for a good while longer.
"Can we ask for more in a Fed Chairman?" Absolutely - we can ask for one that will do what needs to be done to prevent bubbles from forming and do not believe in monetary excess.
mlsoft
AI
