WASHINGTON -- Federal Reserve Chairman Alan Greenspan, worried about excesses in real estate investment, has privately called on other federal regulators to take a closer look at imprudent speculation.
According to Fed sources, Greenspan has told the regulators that there is a limit to what the central bank's monetary policy can do in tamping down inflationary pressures. He has been in contact with the Comptroller of the Currency and the Office of Thrift Supervision, among other agencies.
A footnote: High officials in the Japanese Ministry of Finance recently commented privately that the vibrant U.S. home mortgage market is supporting an otherwise shaky global economy.
SANTORUM IN TROUBLE
Republican insiders in Washington fear that Sen. Rick Santorum, chairman of the Senate Republican Conference, is in serious danger of losing his seat next year to his Democratic challenger, Pennsylvania State Treasurer Bob Casey, because of a poorly planned and ill-conceived campaign.
Grievances by Pennsylvania Republicans are piling up. One banking industry CEO in Pennsylvania offered Santorum a chance to visit his more than 3,000 employees. But the senator's campaign staff declined to immediately accept the invitation, explaining this group was not a "priority." Santorum is accused of not making sure to minimize the negative political fallout from his new book ("It Takes a Family"). A current Republican poll shows Casey 9 percentage points ahead of Santorum.
A footnote: Democratic consultant Paul Begala, who worked on the successful campaign for governor of Pennsylvania by the late Robert Casey Sr., may join the younger Casey's campaign for the Senate.
AFL-CIO President John Sweeney thought the threat by several unions to leave the merged labor federation was only a bluff and was surprised when they actually left, according to labor sources.
To his critics inside the labor movement, Sweeney's surprise suggests that he is removed from reality. The Service Employees International Union (SEIU) and the Teamsters for months had spelled out their clear intention to leave unless Sweeney made concessions that he viewed as unacceptable.
A footnote: The major unexpected labor development was the failure by John Wilhelm, president of Unite Here (hotel, restaurant, needle and textile workers), to run against Sweeney for AFL-CIO president. Sweeney was re-elected without opposition.
Continued White House hostility to Rep. Katherine Harris as the prospective Republican nominee against Democratic Sen. Bill Nelson in Florida is antagonizing the GOP political community in Washington.
The national Republican establishment, led by President Bush's aides, have made no secret of opposition to Harris as a polarizing candidate who could not win a general election. What is surprising is a continued negative attitude toward Harris even though she is now the only apparent GOP candidate after Florida House Speaker Allan Bense said he would not run. Bense was the choice of both President Bush and Florida Gov. Jeb Bush.
Keeping up the anti-Harris front was seen in Republican circles as running counter to the Bush tradition of loyalty. Harris became a prime target of Democrats after her aggressive role, as Florida secretary of state, in the 2000 presidential recount that saved George W. Bush's election.
TWO BUDGET DIRECTORS
Indiana Gov. Mitch Daniels, on a quick visit to Washington Wednesday, lunched one-on-one with Josh Bolten, his successor as director of the Office of Management and Budget (OMB).
The combative Daniels delivered a mock apology to the studious Bolten for recommending that President Bush transfer him from the anonymity of being deputy White House chief of staff for policy to the OMB maelstrom. Their topics of luncheon discussion ranged from motorcycles (Daniels and Bolten each ride them) to budget policy.
A footnote: The Daniels-Bolten meeting took place on the same day that President Bush in Montgomery, Ill., signed and praised a massive transportation bill. At OMB, both Daniels and Bolten completely failed to remove from the transportation bill pork barrel projects earmarked for home constituencies by members of Congress.