Command Economy in the U.S. of A.

It’s a tough time to be Alan Greenspan. More than any other person, the Chairman of the U.S. Federal Reserve Board could make financial markets rise or fall on little more than an awkward phrase like “irrational exuberance.” Nowadays, his interest rate increases are shrugged off by financial markets almost like “non-events.”

It is hard to believe that just a year ago Mr. Greenspan’s clout was so great that was even mentioned as a possible candidate for the presidency. Back then, such a promotion from Fed to White House would have merely been an expansion of Mr. Greenspan’s duties. He had already been widely credited with commanding the U.S. economy. Even media reports on the Fed’s interest rate activities tend to convey a distinctly militaristic flavor.

For instance, back in October 1998, when the Fed lowered interest rates to combat the effects of the Asian and Russian financial markets crises, the Washington Post ran a front page headline proclaiming, “Greenspan Orders Rate Cut.” One can easily imagine a similarly large type, boldface headline when General Eisenhower ordered the invasion of Normandy during World War II.

The comparison to Dwight Eisenhower, of course, is not made by coincidence. Having commanded the Allies to victory in Europe, General Eisenhower was quickly transformed by the media into a powerful political candidate — and, in 1952, he routed his Democratic challenger and served two terms as President.

Alan Greenspan may only command interest rates, but until recently, he seemed to be no less revered. Unfortunately, recent history has not been so kind to Mr. Greenspan. Even the Washington Post is less charitable. After Greenspan raised interest rates in March to counter the rapidly rising stock market, a Post headline in the March 14 edition protested: “Greenspan Misses the Mark in War on Stock Prices.”

These days, financial markets seem to be taking their cues more from lesser lights than central bankers. AOL’s Steve Case who merged his company with Time Warner and let the air out of Internet stocks. Steve Ballmer, who took over for Bill Gates at Microsoft, dragged down Microsoft and just about every other tech stock by not being able to settle the company’s antitrust suit out of court.

No, Mr. Greenspan is starting to appear less like Ike these days — and more like General Douglas MacArthur, Eisenhower’s counterpart in the Pacific Theater. A hero of World War II, MacArthur was later relieved of his command for defying President Truman during the Korean War. We wonder if Mr. Greenspan, should he keep notching up interest rates, will endure a similiar fate.