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Greenspan gets high marks despite economy

*Interested how farewell Greenspan articles are paralleling today's decline in the markets... that combined with indictments on hold waiting to be exercised as early as tomorrow against mobsters in Washington... and well the bears are winning in clear fashion, even in "mass media" land...

Greenspan gets high marks despite economy
By JEANNINE AVERSA
AP ECONOMICS WRITER

WASHINGTON -- Most people give Alan Greenspan high marks for his handling of the economy during his 18 years running the Federal Reserve, and few blame him for what they see as a troubled economy.

Three-quarters of those surveyed rate the current economy as fair or poor and, when asked whether President Bush or Greenspan is most responsible, 55 percent choose Bush, according to an AP-Ipsos poll. Just 29 percent say Greenspan.

"Eighteen years of excellence has earned Greenspan the benefit of the doubt when blame is being allocated," said Carl Tannenbaum, chief economist at LaSalle Bank.

"We've been able to achieve great things amid great challenges- including the stock market crash of 1987, the bursting of the stock bubble in 2000, two wars and the September 11, 2001, terror attacks. Alan Greenspan might be thought of as our most valuable economic player," Tannenbaum said.

Greenspan, 79, will be stepping down from the Fed on Jan. 31. Bush's choice to replace him is Ben Bernanke, 51, a former Fed governor and Princeton University professor and the current chairman of the White House's Council of Economic Advisers.

Bernanke must be approved by the Senate, and he started making courtesy calls on senators Thursday. His first stop was the office of Sen. Richard Shelby, R-Ala., chairman of the Senate Banking Committee, which will consider the nomination.

The choice of the well-respected Bernanke is seen as a safe one for Bush, whose stewardship of the economy has been under fire. In an AP-Ipsos poll earlier this month, only 40 percent said they approve of his handling of it.

Greenspan, on the other hand, has been hailed as an economic genius by economists and politicians. The poll shows the public thinks highly of him, too.

A solid majority - 56 percent - said Greenspan's tenure at the Fed will be remembered "mostly as a time of economic prosperity." Greenspan got high marks from nearly every segment of the population, with some of the strongest support from Republicans, people over 50 and those making at least $50,000.

Although many Americans are fretting about the current state of the economy, most analysts said it actually is in pretty good shape. The public's perception is fueled by high energy bills, the devastation from three hurricanes, concerns about rising inflation, the nation's jobs situation and fears that the housing boom could go bust.

And when they look to point the finger, it's at Bush.

"Ultimately the buck stops with the president. If people are upset about the economy and want to blame someone, that someone is probably going to be the president," said Richard Yamarone, economist at Argus Research Corp.

The poll found a sharp partisan division, with 91 percent of Democrats rating the economy poor or fair compared to about half of Republicans. Nearly three-quarters of Democrats blame Bush while just one-third of Republicans do.

Women, minorities, single people and those making less than $25,000 were most likely to see the economy as fair or poor, with at least 80 percent of each group rating it that way.

Part of Bernanke's job will be to boost confidence in the economy. When he was announced as Bush's choice Monday he said he planned to continue Greenspan's policies. That cheered Wall Street, with the Dow Jones industrial average surging to its highest one-day total in six months.

Bernanke did not speak Thursday when he arrived at Shelby's office, walking briskly past the whirring cameras and gaggle of reporters.

After the meeting, Shelby said the two talked about a range of economic issues, although he wouldn't get into specifics. He hopes to hold Bernanke's confirmation hearing sometime in November.

Shelby expects that Bernanke will be grilled on a wide range of economic topics, including his preference for numerical inflation targets spelling out acceptable bounds for inflation. The Fed doesn't use an inflation target now.

The senator also said that Bernanke probably will be asked about his thoughts on the nation's current fiscal situation - tax cuts and spending issues - as well as budget and trade deficits, jobs and the country's current economic state and its outlook.

Like Greenspan, Bernanke has talked about the great difficulty in identifying when prices for stocks, homes or other assets become overly inflated and turn into a bubble that could suddenly pop and send prices falling. And both have said that trying to prick a bubble through higher interest rates could have done serious damage to the economy.

The survey was conducted by Ipsos, an international polling firm. Results were based on interviews of 1,003 adults taken Monday through Wednesday with a margin of sampling error of plus or minus 3 percentage points.

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On the Net:

Poll results: http://www.ap-ipsosresults.com


LINK: http://seattlepi.nwsource.com/business/1310AP_Federal_Reserve_AP_Poll.html