Inside the numbers: Greenspan

Posted: May 20, 2003 12:00 AM

It's no secret that for some time I've put much or most of the blame for the nation's prolonged economic anemia squarely on the shoulders of Federal Reserve Czar, er, Chairman Alan Greenspan. Admittedly, cataclysmic events like 9-11 and the war in Iraq also have contributed to the economic malaise. But the initial plummet, which started before President Bush took office, rests with Greenspan.

That's what I think. Here's what America thinks.

In our latest national survey, we asked 1,000 adults if they believe Greenspan should be renominated again as Fed chairman. There was certainly no "irrational exuberance" for returning America's economic guru to yet another term. Fifty percent said to keep Greenspan, while 18 percent said "no." Thirty-two percent said they didn't know enough about the man to form an opinion. That is remarkable, considering that Greenspan is likely responsible for the disappearance of their 401ks, or even their jobs.

Once again, let's set the record straight. It was Greenspan who in the late 1990s was unwilling to accept the concept that there actually could be a new and, yes, artificial manner by which we valued corporations. Stuck in his 1940s concept of economic growth, the toast of Wall Street made it clear that the only real cause for America's then-economic boom was the additional productivity created by new technology. He warned that technology would not be able to continue to promote such growth.

Next, he launched a crusade that seemed bent on ensuring that kind of growth indeed did not happen. By repeatedly raising interest rates during those heady days, Greenspan frightened the world of capital investors and forced scores of growing or emerging companies to their knees, taking hopeful investors down with them. Once he had gone too far, the chairman reversed course abruptly. He started a string of interest rate cuts.

Did any of this economic wizardry work? Let's see. Unemployment has soared to its highest level in years. The dollar is weaker than the euro -- yes, even the pathetic euro. Small companies can't qualify for any of the cheap money that all those interest rate cuts were supposed to trigger. And large corporations -- slaves to "Greenspeak" and afraid to show anything less than ever-increasing profits -- are not investing in needed technology upgrades, new employees or new products.

How would we be doing without Chairman Greenspan's recommendations? I say, at least as well as we are now, and probably better. Members of Congress from both parties more and more are finding that dealing with the oracle of finance is becoming almost impossible. In recent hearings, lawmakers called on Greenspan to offer his thoughts on how large a federal tax cut should be. The chairman begged off by saying that was a congressional matter and that he didn't want to overstep his bounds. You could sense the frustration on Capitol Hill.

Yet with his supposedly wise -- and certainly veiled -- manner of intimidating and condescending, few seem to be willing to take Greenspan to task. So here, Mr. Chairman, allow me to speak for the knowledgeable 18 percent of Americans that want you to step down; for the 32 percent who don't know your name even as they live the unhappy fallout of your policies; and even for those who want you to stay, but can't say why. I'll speak for them all:

Get out. Get out before you lower interest rates again and make it impossible for retirees and those on a fixed income to earn anything at all on what used to be dependable staples of the economy, such as certificates of deposit and money markets.

Get out before you open your mouth again and start to pontificate on the value of companies or the strength of the consumer. Have you ever noticed that every time you speak before a congressional hearing, the stock market drops?

Get out before the dollar is worth less than the peso, or before the last vestige of small business or entrepreneurial spirit is destroyed by your "make money cheap" concept. So far, that tired mantra has made bankruptcy rates soar and the dollar practically deflate.

Mr. Chairman, you were great in your day. But like so many retirement accounts and jobs, that day has come and gone. Another term of your fiscal medicine and our free enterprise may be transferred from intensive care to the mortuary.