This is a bit scary: Howard Dean is calling for Alan Greenspan's removal...the criticism is that Greenspan is too political for supporting Bush's plan for tax cuts in lieu of spending increases as the economic stimulus during the recent recession. In this area, I think Greenspan did a good job tip toeing around a politically charged issue by warning about the problems of increased deficit spending, but in conceding tax cuts are preferable to spending increases. In this case, he did what the economy required.
The only mistake I believe that Greenspan has made was in jacking up interest rates at the end of the dot com bubble. The bubble was bursting on its own. I believe that the added weight of high interest created a more dramatic bust.
I do agree that Greenspan and his personality cult has been in power too long. For that matter, I have greater admiration for Paul Volker who stepped down early to demonstrate that Federal Reserve was more about monetary policy than personality. Greenspan's reign has had the negative effect of rising the position of chair of the Federal Reserve to a Godlike status.
I agree with Dean that Greenspan has been in office too long. I worry about Dean though. Dean is the candidate who is more likely to have a politically charged monetary policy than any others. I suspects Dean's projection of political motivations on Greenspan is a warning sign that Dean's will push for highly politicized monetary policy.
Post a Comment