Robert Novak

 This omission of "measured" would actually have seemed a flagrant misjudgment in view of the economy's apparent weakening after the March 22 meeting. Federal Reserve Governor Ben Bernanke stepped in during the closed-door meeting to say this was a very bad idea. The language was not changed.

 By the time the FOMC met on May 4, Bernanke was not present due to his appointment to the president's Council of Economic Advisers. No effort was made this time to remove "measured."

 Where was Greenspan, the most masterful Fed chairman in history? He seemed disengaged March 22 in the debate over "measured," according to Fed sources. One especially adroit Fed-watcher described his performance that day as "coy."

 Greenspan was not coy last Tuesday when, in an apparent accident, the Fed's public statement omitted a sentence saying that "longer-term inflation expectations remain well contained." Before much damage could be done, the omission of "contained" was described as an oversight and Greenspan restored the word. The chairman wants no changes.

 Indeed, Greenspan does not want to make waves as his long, celebrated tenure comes to an end. If he leaves on schedule next January, he will fall a few months short of the record long chairmanship by William McChesney Martin ending in 1970 after 18 years, nine months. Greenspan would like to beat that record, and he may have a chance, considering the slow pace at which replacements are made in the U.S. government.

 All signs are he just wants to get out without a "Greenspan recession" or a "Greenspan inflation." Another two months will elapse before the next FOMC meetings, providing time to sort things out. Greenspan surely is not interested this late in his tenure in instituting more effective mechanisms to regularize the central bank's operations. Raising interest rates one quarter of one percent seems to be frozen as Fed policy, whatever its impact.

Robert Novak

Robert Novak (1931-2009) was a syndicated columnist and editor of the Evans-Novak Political Report.

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