GREENSPAN REVISION REVISITED.
Assessing the Former Fed Chief.
This Article was in National Review in the July 14, 2008 Edition.
I did not read the article, but I am appropriated the title.
Paul Volcker was Fed Chairman from 1979 to 1987.
He is the man who purged inflation from the economy, while Alan Greenspan was more of a manager.
Greenspan presided over 18 years of economic growth with 2 brief recessions.
He held the line on inflation, but was pragmatic in the way he used his tools.
Was Alan Greenspan a good manager of the status quo?
On balance, the answer is qualified yes.
I think he might have screwed up in 1991 by trying for a soft landing, but instead created temporary stagnation in the economy.
I think in 2001, he did a brilliant job in keeping the economy from getting worse.
I do think his reduction in interest rates to extremely low levels around 2004 - 2005 has caused our current instability in the Housing Market.
I do not know what pressure the politicians have applied to him in the past so that's an open question.
18 years of solid economic performance and the keeping of the economy from a deeper recession in 2001.
Another recession in 1990 that was caused by managerial inexperience.
The current housing problem because interest rates were kept way to low for too long a time.
In essence, a man who was a manager, but not a leader.