Don’t Do It Mr. Greenspan
Editorial by George Anderson
If all goes as expected, Alan Greenspan and the members of the Board of Governors for the Federal Reserve Bank will raise interest rates tomorrow by a quarter of a point.
It will be the eighth consecutive meeting the Fed has chosen to up the rate in an attempt to head off inflation while assisting the economy to grow at a sustainable rate.
While many, if not most, economists support the Fed’s action to date, USA Today reports that some are beginning to wonder if Mr. Greenspan and associates need to be as concerned about inflation with the economy appearing to pull back.
Count us among those who think the Fed should leave rates alone. Of course, we have a history of questioning Mr. Greenspan. Here is a piece we had published back in December 2000.
How the Greenspan Stalled the Economy!
by Dr. Screwloose (AKA George Anderson)
Every investing investor likes shares to go up.
But the Greenspan at the Fed said enough is enough.
The market is crazy.
Kid geeks getting rich.
Paper millionaires and dot-coms, it just made him twitch.
The Greenspan hated inflation more than boiled prune stew.
It had to be wiped out, what could he do?
Last year and this, he fumed and he fussed.
“I’ll rate hike and rate hike, inflation I’ll bust.”
“I must find a way, if it’s the last thing I do,
to slow the economy, the one they call new.”
But around him were doubters. They thought he was nuts.
Forget about rate hikes give us some cuts.
The prime rate ascended. The cost of borrowing went up.
The Greenspan never wavered. He wouldn’t let up.
One hike, two; three, four, five and six,
the Greenspan continued, inflation he’d fix.
Everywhere he’d turn, no inflation was found.
But, he didn’t care. It must be around.
Now business has faltered.
Many dot-coms have flopped.
Earnings are down.
Will the Greenspan now stop?
Unemployment is rising.
The stock market’s down.
There is no soft landing.
We’ve plunged to the ground.
Last week in New York the Greenspan did speak.
To community bankers, the man is a freak.
He concluded and alluded that inflation was tamed.
The market went crazy. Our nest eggs are saved.
But why, we wonder, did it take so long
for the Greenspan to realize he was terribly wrong?
But enough of the past, let’s look straight ahead.
What can we expect from the Greenspan and Fed?
The Greenspan and cronies, together will meet and rates they will lower.
Oh, won’t that be a treat?
Moderator’s Comment: Has the Federal Reserve gone far enough in raising interest rates at this time? What impact will further rate increases have on
consumer spending and retail? –
George Anderson – Moderator