An Open Letter to Mr. G
DEAR CHAIRMAN GREENSPAN:
I doubt the decision you and your colleagues on the Federal Open Market Committee face Tuesday will be a very agonizing one. Having hiked the federal-funds target rate over 14 months in quarter-point steps from 1% to 3?%, you should keep the momentum going. Hike to 3?%, as originally planned.
The argument for standing pat is that Hurricane Katrina may have slowed the economy more than is immediately apparent. But in practical terms, the issue is more symbolic than real. If you don't go the quarter-point next week, you'll do it six weeks from now at the next FOMC meeting, on Nov. 1. Meanwhile, the Fed has a far more potent symbolic asset that it might as well exploit while it still can.
I mean, of course, you.
When you finally step down from your post the first of February, you will have served nearly 18? years as Fed chairman, or more than twice as long as your charismatic predecessor, Paul Volcker. By now, your own charisma may be commensurately about twice as great.
So in terms of symbolism, hiking according to plan will only symbolize the departing Fed chairman's confidence that the economy is resilient enough to stay the course.
Once you do depart, we might start asking a few hard questions about this image you've created. First, were you really the philosopher-king you were made out to be? And even if you were, might there be something wrong with an institution whose effectiveness depends on finding geniuses of your caliber?
Of course, how effective the Federal Reserve has been on your watch is a matter of opinion. The idolatry you've enjoyed, which I believe you've subtly encouraged, comes very close to portraying you as only capable of fixing problems, never creating them. That is as absurd as the 99% performance-rating that your fix-it skills normally get.
"Greenspan's Record: An Activist Unafraid to Depart from the Rules," read the headline in the recent Financial Times retrospective on your career. "Few would argue," the article declared, "that Mr. Greenspan's discretionary approach has been anything but successful."
For example, the article accepts your contention -- as does a similar evaluation in The Wall Street Journal -- that your central bank can't prevent bubbles. Thus, the stock-market bubble of the late 'Nineties, and the housing bubble of the past couple of years, were not even sins of omission on your part. What you do so successfully is resort to a "mopping-up" strategy once the bust occurs.
By framing this issue in this way, you evade the real question: To what extent, if any, can the Federal Reserve avoid creating boom and bust? You argued nearly 40 years ago, in an article called "Gold and Economic Freedom," that the central bank can't help destabilizing the economy. Isn't that why the booms on your watch were punctuated by two recessions? If you no longer agree with what you wrote (essentially the Austrian theory of the business cycle), you ought to explain why. Otherwise, the only question is whether the boom-and-bust cycle the central bank inevitably does cause can be mitigated in some way.
That concern is very different from the one you frequently express about avoiding price inflation. There, I'm willing to accept your professional bona fides. Volcker did the "very heavy lifting against inflation," as you recently put it, and you carry on his good work.
But when you recently told Rep. Ron Paul, the libertarian congressman from Texas, that the anti-inflation discipline of a gold standard is no longer needed because "central banking...has learned the dangers of fiat money," you sounded naive, at best. You, yourself, recently expressed concern that the government might eventually inflate to finance the retirement of the baby boomers. Indeed, it could be much worse than that. If governments around the world are running up debts to support their retirees, the pressure on their central banks to underwrite that debt ("monetize" it) by printing money could be impossible to resist. Not to do so could risk global recession.
"I assume," you observed, "that these imbalances will be resolved before stark choices again confront us."
That assumption is probably your most tragic legacy.
致格老的一封公开信
亲爱的格林斯潘主席：
我想你和你在联邦公开市场委员会(Federal Open Market Committee)的同事们周二一定面临非常痛苦的抉择。在过去14个月中将联邦基金利率以每次0.25%的幅度从1%一步一步上调到3.5%之后，你应该继续保持这一步伐，像人们的预期一样，将利率上调至3.75%。
有些人赞成保持利率不变，他们声称，卡特里娜飓风对经济的阻碍作用可能要比现在表现出来的还要大。但从实际角度看，这个问题的象征意义大于现实意义。如果此次不加息25个基点，你也会在6周之后11月1日的下次FOMC会议上加息。而且，Fed还有巨大的具有标志性意义的资产可趁还能利用的时候加以利用。
我指的当然是你。
到你明年2月初卸任时，你已担任了将近18年半的Fed主席，比富于领导魅力的前任沃尔克(Paul Volcker)多出了一倍多的时间。现在，你自己的感召力也几乎相当于他的两倍。
因此从象征意义来说，按计划上调利率只是要表现一下即将离任的Fed主席对于经济保持足够的活力、能够在现有轨道继续运行的信心。
等到你正式离任，我们可能就要开始就你所树立的形象问一些尖锐问题了。首先，你真的是人们所说的哲学大师吗？即使你真的是，如果一个机构需要靠找到一位像你这样的天才才能有效运转，这本身是不是有什么问题呢？
当然，在你的管理下Fed的工作效率如何，这恐怕也要受到质疑。人们对你的个人崇拜几乎已经把你描绘成只解决问题而从不制造问题的人。我相信对此你也沾沾自喜。这就像你以你解决问题的能力而获得的99%的表现评价一样荒谬。
看看最近《金融时报》(Financial Times)回顾你职业生涯的一篇文章的标题：“格林斯潘之路：一位不怕远离规则的活动家。”文章中称，毫无疑问，格林斯潘的随意做法并不能算是成功。
比如，这篇文章引用了你的观点说──《华尔街日报》(The Wall Street Journal)也有类似的评价──Fed并不能防止泡沫的出现。正因如此，上世纪90年代末股市的泡沫，还有近两年的房地产泡沫甚至没有被算作你失察的责任。你的成功之处就在于在危机出现时即时地采取了扫荡战略。
通过以这样的方式应对问题，你回避了真正的问题：Fed究竟能够在何种程度上避免经济的大起大落，如果它具备这种能力的话。你在近40年前的一篇名为《黄金与经济自由》(Gold and Economic Freedom)的文章中曾表示，央行不可避免地会导致经济的动荡。而这就是你在任期间的繁荣要夹在两次衰退中的原因吗？如果你不再同意你所写的观点，你应该解释一下原因。否则，唯一的问题就是央行不可避免地带来的这种盛衰周期是否能以某种方式加以缓解。
这种担忧同你频频表达的如何避免通货膨胀的担忧明显不同。在这里，我愿意认可你的职业精神。正如你最近所言，沃尔克在遏制通货膨胀方面功不可没，而你则延续了他的卓越成绩。
但是你最近曾对德州共和党议员保罗(Ron Paul)说，而今无需再遵守遏制通货膨胀的金科玉律，因为央行已经能够把握不兑现纸币的危险时，你却显得有些幼稚。你本人最近就对政府可能增加货币发行量，为婴儿潮时期出生的那一代即将退休的人筹集退休金而感到忧心忡忡。事实上，情况可能更糟。如果各国政府都通过发债为退休人员提供保障，那么央行就将面临难以抵抗的、通过印刷纸币来消化这些债券的压力。不这样做可能会出现全球衰退的风险。
“我想，”你说，“这种失衡局面会在我们再次面临艰难抉择前得到解决。”
你的这种想法或许是你留给继任者的最不幸的传承。
