Brad DeLong's Semi-Daily Journal (2004)

You aren't suggesting that he should be reappointed? Isn't it time for Greenspan to go, regardless of your opinion of his performance?

It doesn't matter if you want Greenspan to stay or go - what matters here is the Wall Street reaction - and without hard data to work off, it gets based on rumor and speculation. If the White House wants to play chicken with June 20, then so be it -- but the market will react to whatever rumor is hot before that date, based on fact or pure fiction. Hard data gives cosistant results, while wild speculation will give us the swings in the market that everyone hates - so if not Greenspan, give plenty of notice that it won't be him, and give Wall Street an idea of who may be taking on the responsibility.

Oh, lordy be.

No fan of Greenspan here, but the thought that C-Plus Augustus might have anything at all to do with selecting Greenspan's successor is grounds for considerable alarm.

I'm going to be into the whiskey until all hours tonight, reflecting on the possibility of the top job at the Fed falling into the hands of Robert McTeer.

("If we all just go buy a new SUV, everything will be OK.")

What marquer said. The idea of Dick Cheney telling Bush who he ought to put in charge of the Fed would scare me to death. Hopefully the Senate Dems would filibuster any change until after the election.

I can live with Greenspan until 2006. What's the case against him? No question, he's said a number of things since Bush's inauguration that were quite reasonably interpreted as qualified support for Bush's big tax cuts. And that was not only wrong, but had real consequences.

But if that's the sum total of the objections to him, I'd rather have him controlling the interest rates for the next two years than anyone Bush would appoint to replace him. And then Kerry would get to choose his own man (Robert Rubin, maybe?) in 2006.

Greenspan belongs to the Skull and Bones.

I also think he is going senile.

Apparently, "International Economy" is suggesting that Greenie could remain Fed chairman till 2008 (sorry, I'm no longer a subscriber, so this is just Jiji hearsay). The notion is an odd one, given that his other, non-renewable, term runs out before 2008. I would think that sometime in the course of returning rates to neutral, a pretty simple project, really, he would hand over to a successor. That would allow the successor to get comfortable in the job before undertaking any more difficult task, such as saving the world.

The radio show "Marketplace" had an interesting take.

It's not that they are pressuring Greenspan, it's that they want the reappointment photo op to have maximum political effect.

It implies that they are waiting for a slow news day. Good luck.

That being said, I have to think that this furore indicates a problem with the Federal chairman appointment process.

Greenspan has been there so long that if we were to die (how could you tell?), the markets would be inclined to put sunglasses on him and do the "Weekend at Bernie's" thing.

I'm wondering if consecutive terms are a bad thing for the Fed Chairman.

RT wrote, "No question, he's said a number of things since Bush's inauguration that were quite reasonably interpreted as qualified support for Bush's big tax cuts. ... But if that's the sum total of the objections to him..."

How about his doing nothing to contain the late 1990s bubble (and in fact making it worse by babbling about New Era productivity growth)? Or the current (not-proven-but-certainly-plausible) housing bubble?

In fact, the most ridiculous thing about the Greenspan and the 1990s bubble is his claim afterwards that it wasn't possible to know it while the bubble was on. Bunk---I knew it and profited (by mostly getting out of the stock market by late 1999).

It would be good of aWol to allow his successor
to nominate a new Chairman. AG has lost it, and
is reverting to his class. I'm off to get an
adjustable rate mortgage.

Good point, liberal - I stand corrected. IIRC, Greenspan was talking about "irrational exuberance" when the Dow was ~7000, but changed his mind when it was considerably higher.

RT,

Right, AG did jawbone the market, but as you note it was somewhat early on in the bubble.

Is anyone else mad with Greenspanon what he did to social security? Social security used to be a simple "pay-as-you-go" program. Then in the 80s the Greenspan commission suggested to increase the payroll taxes (the most regressive kine in all taxes) to "build-up" a surplus, which conveniently helped all Reagan taxcuts and defense spending. Being a Ryan student, he must have known that it is inevitable to invite looting with such a big pile of "surplus" sitting there, and of course this is exactly what have happened since. And now he is suggesting to cut social security benefits -- we have all been had.

Of course, the alternative to Greenspan, especially if it is from Bush, can be worse.

Is John Kenneth Galbraith too old to be Fed Chairman?

Pat, in fact, i think greenspan shouldn't be reappointed for two primary reasons: the social security double-talk and his clear support for the fiscally irresponsible bush tax cuts.

but i also think he shouldn't be reappointed because he's been in the job long enough.

No one is indispensable.

howard,

While I agree with you in principal, I do want him to be reappointed this time for the following 2 reasons: one is that he is a known-evil, which is most likely better than whatever evil Bush will come up with; the other reason I'd like Greenspan to stay is that for the next year or so, we may have a few financial disasters blown up on us with the FOMC increasing rates some time this year. Since Greenspan is largely responsible for the buildup of the financial excess, I think it's only fair that he is the one to face the consequences.

Keep Greenspan going until the revolution, eh?

pat wrote, "Is anyone else mad with Greenspanon what he did to social security?"

Yes...for this doubletalk alone (increasing SS taxes, now fretting about paying out SS assets) AG should be crucified.

We wouldn't want any young, crazy wippersnappers like Alice Rivlin to take over and start a revolution in uncertain times like these, would we? :^)

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You aren't suggesting that he should be reappointed? Isn't it time for Greenspan to go, regardless of your opinion of his performance?