Problems loom, of course -- growing national debt and trade deficits, plus a weak dollar. All of these economic dead weights are dutifully (and constantly) highlighted by Greenspan. He loves to apply the brakes upon the first sign of economic acceleration. (We mustn't have any "irrational exuberance," right, Alan?)
His concerns are not invalid, but they are often a double-edged sword. For example, some of our nation's best-known multinational corporations fare better when the dollar is weak. In fact, they make almost all of their money overseas and suffer substantially when the dollar is strong. You can rest assured that many of Greenspan's best pals have seen their stock values rise in recent months, and for some of the same reasons that the Fed chief so loudly laments.
The deficit also has an upside. Yes, George W. Bush has done a good job of imitating Lyndon Johnson in trying to cure all ills with government spending. But this fiscal rashness has also pushed a boatload of contracts and cash out into the economy. Now the ranks of Congress are swelled with professed fiscal conservatives. They had to hold their tongues while the president ran for re-election. Now the path is open for them to do the dirty work of reining in spending.
Don't expect to see the huge market gains of the late '90s again soon. That era's immature and unrealistic gold rush-style investment strategies are likely off the table for some time to come.
Steady and sustained growth is upon us. Wall Street's spoiled brats are now seeing that companies can't be expected to perform new miracles every quarter. The wisdom of a Republican-based economic model, tempered with the realization that Congress mustn't kill the golden egg-laying goose with excessive spending, should result in an expanding economy and market -- whether Alan Greenspan keeps his big mouth shut or not.
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