Spellbound

Jesse Walker | May 30, 2007

Jay Hancock understands why Alan Greenspan wouldn't speak forthrightly about the economy while he chaired the Fed: "He didn't want to go down in history as the Federal Reserve boss whose mouth caused a market crash." He also understands why Greenspan is more willing to pipe up now: The old man "wants to make some money after working for the government for nearly two decades. Giving speeches via satellite is an easy way to do so."

What Hancock doesn't get is why so many people are listening:

For many investors, old habits die hard, and the alleged maestro still moves markets whether or not he actually says anything.

On two occasions this year, Greenspan has caused turbulence for stocks....But why is everybody paying attention?

Without the power to create money and steer the world economy, Greenspan is just another forecaster. And not a very good one. His firm, Townsend Greenspan, was famous for making bad forecasts -- particularly on inflation -- before he joined the Fed.

"Inside that opaque, mush-mouthed gnome lurked an eloquent commentator waiting to get out, and now he's indulging all the urges that he stifled in the 1990s," Hancock concludes. "But it's too late. They don't allow do-overs on Wall Street."

Elsewhere in Reason: Brian Doherty reviews Greenspan's term as wizard-in-chief.

Comments

|5.30.07 @ 9:42AM|#

This of course is another excellent Reason link to Ron Paul. The congressman is insightful as ever.

http://www.reason.com/news/show/38384.html

Reason: Congressman Paul, you've tweaked Greenspan about his radical Randian past…

Paul: Shortly after I got back into Congress, about 1999 or so, they had invited us on the House Financial Services Committee to get our pictures taken with Greenspan and say hello. I dug out my copy of The Objectivist Newsletter [edited by Ayn Rand] where he wrote his gold article [in which Greenspan praised the gold standard as a source of economic stability, guarantor of economic liberty, protector of savings, and check on government's power to inflate and spend]. When we started talking I flashed it out and said, "Remember this?" He said, "Yes, I certainly do."

I opened it up to his article and said, "Remember writing this article? Would you autograph it for me?" And while he was autographing it I said, "You want to write a disclaimer on it?" "No, I read it recently," he said, "and I wouldn't change a word."

Toward the end of his reign I brought that up again in a congressional hearing. I was a little more confrontational with him about what he used to think and why it's different now, and he said, "That's a long time ago, and I no longer subscribe to those views." He did put a disclaimer on it. The first encounter was private, and the second was a public statement.

Thomas Paine\'s Goiter|5.30.07 @ 9:42AM|#

That fucker is a plague that should be wiped from the earth. That asshole was an awful fed boss and now he's fucking with the markets every time he opens his mouth.

DIAGF.

|5.30.07 @ 9:53AM|#

Wow, TPG. Have you been feeling irritable lately? I mean, that's a pretty big step up from kicking him in the balls.

What do you think of George Soros, btw?

steveintheknow|5.30.07 @ 9:58AM|#

I dig the batin' wizard.

ed|5.30.07 @ 10:44AM|#

Check out Greenspan's brilliant essay "Antitrust" (published in Ayn Rand's Capitalism: The Unknown Ideal). I've never encountered a better analysis of the subject.

Robb|5.30.07 @ 10:45AM|#

The Wizard from Christchurch! He at least was entertaining. (Sorry, Alan.)

Bhh|5.30.07 @ 10:50AM|#

Uncle Al wants to scare you into bonds because he's working for Pimco now.

Thomas Paine\'s Goiter|5.30.07 @ 11:11AM|#

Wow, TPG. Have you been feeling irritable lately? I mean, that's a pretty big step up from kicking him in the balls.

Greenspan is the windmill to my Don Quixote. No one did more to fuck up the economy in the last 25 years than he, and he is somehow revered by the goddamned morons in the media.


What do you think of George Soros, btw?

Fine by me. He never used his governmental authority to speak on things that he had no business speaking about in his duties.

Maria Sharapova|5.31.07 @ 8:03AM|#

Goodness, Goiter, you should cut back on your caffeine.

Well, no, I take it back. You're merely expressing your anger and opinion; no reason to mock that. (i.e., I hate it when I'm angry and a coworker or someone laughs off my concerns.) So, vent on. You can go back to being (somewhat) more even-handed tomorrow.