Someone we trust says something reassuring.

July 16, 2002 1:54 PM

Someone we trust says something reassuring. Fed Chairman Alan Greenspan, arguably the most powerful man in the world, blames "infectious greed" for the recent panic-like tail-spins on Wall Street, but says that the economy is on the way to recovery. One comment held that Greenspan was finally able to let out how he feels about what's going on, without shrouding his opinion in economic jibber-jabber.

"For once he really spoke his mind. He usually tends to obfuscate things quite a bit."

But really, how many of you expected Greenspan to say anything other than "the fundamentals are in place for a return to sustained healthy growth"? Does Greenspan actually feel this way? Could it be that he is actually majorly pessimistic, but is using his soothing sweet-song voice and obvious clout and earned respect to somehow buck recent trends? Bush's speech didn't do much for our faltering economy, but will Greenspan's? Can one man's mere words possibly change the course of history? Well?
posted by Hammerikaner (27 comments total)

Disclaimer: I'm a stock market novice, so I don't know what I'm talking about.

Greenspan spoke of the "irrational exuberance" of the market during the dot-com boom, so I see no reason to think he'd be less honest now than at any other time. However, when the guy's words can cause millions of dollars to be made or lost in an afternoon, I don't know how honest he can ever be.
posted by rcade at 2:25 PM on July 16, 2002

Does Greenspan actually feel this way?


Isn't he too intelligent and knowledgeable for that? He's inscrutable. This is how I imagine the old wizard reacting to the Wall Street pundits' predictions:

posted by MiguelCardoso at 2:42 PM on July 16, 2002

I don't want to know what should have happened if Greenspan would have painted a more somber picture of the economy than what it currently is. Like it or not, Greenspan's words are like mantras coming out from the mouth of God for Wall Street regulars.

Or maybe he's just being smart enough for not screwing the Dow with the wrong words.
posted by betobeto at 2:48 PM on July 16, 2002

Miguel, head's up my friend...

On topic, have you guys been reading your own reactions to the market's downturn, Bush's scandals, Enron, etc....? Greenspan is one of the few people left in this country that can put confidence back into the public's heart, because he's credible. So when he starts using loaded rhetoric, pay attention.
posted by BlueTrain at 3:00 PM on July 16, 2002

I would be curious to know if he made or lost a lopt of money in the market. This might tell us something about his "vision thing."
posted by Postroad at 3:07 PM on July 16, 2002

Postroad - I'm not sure, but I'd be very surprised to learn that the chairmen of the fed doesn't have to be completely divested.
posted by willnot at 4:13 PM on July 16, 2002

the stock market is not the same as the economy. people are taking their money out of the stock market not so much because the economy is looking bleak but because they don't know which companies are trustworthy accounting-wise. Thus, many stocks are probably greatly undervalued right now. The problem is that nobody knows which are undervalued and which are future Enrons. eventually investors will figure it all out and put their money back into the market.

meanwhile, Greenspan's right that a lot of the major economic indicators look at least somewhat positive. so as much as i dislike the man for his monomaniacal obsession with controlling inflation at all costs, i think he's probably right this time.

Postroad: here's your answer
posted by boltman at 4:29 PM on July 16, 2002

Considering his own cupability for the current economy, with his ham-fisted interest rate manipulation (and hasty correction), I'd say his once esteemed credibility is at an all-time low. I suspect this will have negligible effect and influence.
posted by rushmc at 5:11 PM on July 16, 2002

Considering his own cupability for the current economy, with his ham-fisted interest rate manipulation (and hasty correction),

What culpability? Raising and lowering interest rates are not geared toward instant results. Please explain yourself.
posted by BlueTrain at 5:27 PM on July 16, 2002

where was he during the dot com crash? he was the one with the bb gun bursting the bubble. saying that if he didn't keep raising interest rates that there'd be inflation.

he kept tweaking, telling everyone that the dot coms were big fakeouts that they all went under, even the good ones.

now in the wake of some of the biggest non-dot coms being all the things he said dot coms were (huge fakers, full of crap, with numbers you shouldn't believe) he's trying to say alls good in the hood.

why, because his blue chips are hurtin? yes, thats why.

f allen greenspan. f him.

how can a man who has lost trillions of dollars be able to keep his job? ::cough::white::rich::republican::cough::
posted by tsarfan at 6:49 PM on July 16, 2002

greenspan created this whole bubble and its aftermath by not doing the right thing and raising interest rates in 1995-6 timeframe. we would have had a short recession and a drop off in stock prices and it might be all over by now. given what has happened instead, i'd be surprised if this mess is over before 2010.
posted by muppetboy at 6:57 PM on July 16, 2002

If ever a face reflected that sincere diabolical purposes, and that the gears of its mind hath sought to wreck evil upon this world, truly...this is the face.
posted by adampsyche at 7:07 PM on July 16, 2002

(delete word "that")
posted by adampsyche at 7:08 PM on July 16, 2002

Greenspan is white? I wonder if that was a surprise to his two Jewish parents.
posted by NortonDC at 7:33 PM on July 16, 2002

rich

According to boltman's article as linked above, Greenspan's personal net worth, excluding any of his wife's money, is only $3.6 million, which would hardly qualify him as being "rich".

republican

Greenspan's unprecedented 4th term was brought by Clinton, who I believe is a Democrat.
posted by BlueTrain at 7:50 PM on July 16, 2002

what planet are you from where $3.6M doesn't qualify as "rich"?
posted by muppetboy at 8:00 PM on July 16, 2002

only $3.6 million, which would hardly qualify him as being "rich"

That's rich.
posted by mrhappy at 12:38 AM on July 17, 2002

I feel so much better now with that twenty in my pocket. Not even considering myself "poor". Working poor perhaps. But that's for my next communistic outburst.
posted by crasspastor at 1:59 AM on July 17, 2002

Bush's speech didn't do much for our faltering economy

Bush's speech didn't do much good, I think you wanted to say. It did a whole bunch of bad.
posted by stavrosthewonderchicken at 2:35 AM on July 17, 2002

Ever since the market's slide in 2000, Greeenspam and the Gov't has been talking up the economy. Since our economy is driven by consumer spending, which is dictated by consumer confidence, it has been their strategy to make us feel good about the economy even when it's not good, in hopes that we, the consumer, keep spending, thus saving the economy.

Probably a good strategy, but it doesn't take away from the fact that they are not telling the truth.
posted by eas98 at 7:37 AM on July 17, 2002

If you find Greenspan a little too, well, dry, be sure to check out Ed Asner's dramatic reading of the speech. (via destinyland)


I love this new "infectious greed" phrase, by the way. It perfectly summarizes the policies that led us to where we are. That is, the surrender of government regulations in exchange for campaign contributions.
posted by emptyage at 8:46 AM on July 17, 2002

I'm with you emptyage. Smokin' Joe Conanson does a great dissection of Greenspan's speech at his 'blog today also. In essence, the lifelong Rand devotee has finally grown up and recognizes that greed may actually be a "bad thing." And having Asner do the speech with spice instead of deadpan!! I'm increasing my donation to NPR, that was brilliant!
posted by nofundy at 10:05 AM on July 17, 2002

NortonDC: Since when does being Jew != being white? Sure, not all Jews are white, but lots are.

emptyage: Thad Ed Asner link rocks :)

By the way, how can anyone blame Greenspan for the current problems? There was hardly any inflation or joblessness during the boom. If there's no inflation, what's the point in razing interest rates? We had a genuine 'positive shock' in the supply side in the 1990s, pushing the equilibrium GDP out. What could Greenspan do?
posted by delmoi at 10:09 AM on July 17, 2002

er *rasing

Damn spellchecker!
posted by delmoi at 10:09 AM on July 17, 2002

Um, try raising.
posted by eas98 at 11:09 AM on July 17, 2002

Semites are not Caucasians, nor vice-versa. Anybody may worship any way they choose, but ethnicity/race is the topic.
posted by NortonDC at 11:14 AM on July 17, 2002

the point of raising interest rates was to burst the bubble before it got even more out of control. this was a *good* thing, not a bad one and should have happened years before it did.
posted by muppetboy at 1:02 PM on July 17, 2002