The Best Friend an Economy Can Have

As the Federal Open Markets Committee of the U.S. Federal Reserve meets to consider whether to raise interest rates again, Alan Greenspan’s handling of the booming U.S. economy is back in the news. Considered by many — and perhaps even himself — to be the most powerful figure in the global economy, our new “Read My Lips” feature will help bring Mr. Greenspan into focus.

What worries you the most?

“It is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress.”

(Greenspan, in 1998)

“He always looks like he’s coming out of a funeral.”

(Former Republican presidential candidate Steve Forbes, August 1999)

What if the U.S. and global interests collide in managing the economy?

“We would never put ourselves in a position where we envisage actions we would take to be of assistance to the rest of the world, but to the detriment of the United States.”

(April 1999)

Are great Federal Reserve Board chairman born — or made?

“I have learned more about how this new international financial system works in the last 12 months than in the previous 20 years.”

(In 1999)

Should the United States try to guide the global economy — or take a “hands-off” approach?

“The United States has been in the forefront of the postwar opening up of international markets. It would be a great tragedy were that process reversed.”

(In 1999)

What about Mr. Greenspan’s work ethics?

“I have seen him read the [1,000-plus page] statistical abstract of the United States — including the footnotes.”

(Colleague of Alan Greenspan, February 1998)

Why does Mr. Greenspan truly love his job at the Fed?

“Once you’ve tasted the thrill of having the $9 trillion-a-year economy as a lab to test your theories about how interest rates affect the general well-being, it’s hard to stop.”

(Washington Post journalist John Burgess, January 2000)

What sets Mr. Greenspan apart from the rest of us?

“Mr. Greenspan is demonstrating that he’s either better at this than any human being has a right to be — or luckier than any human has a right to be.”

(U.C. Berkeley economics professor Bradley DeLong, June 2000)

Does everybody agree?

“Well, he was consistently wrong about how low unemployment could go — and he was consistently wrong about economic growth. I think that my Uncle Joe could have done a good job during this period.”

(U.S. Senator Byron Dorgan, December 1999)

Will Mr. Greenspan be there forever?

“If Mr. Greenspan should happen to die, God forbid, I would do like they did in the movie ‘Weekend at Bernie’s’ — I’d prop him up and put a pair of dark glasses on him and keep him as long as we could.”

(U.S. Senator and former Republican presidential candidate John McCain, December 1999)

Is he really as good as gold?

“Much of the world is now quite happy to accept the idea that a greenback backed by Alan Greenspan is just as good as one backed by gold.”

(New York Times editorial, May 1999)

Does the head of the U.S. Fed need to have some acting skills?

“Alan Greenspan and Woody Allen have one thing in common — they both know how to play only one character.”

(Senior economic advisor to the Clinton Administration, July 1999)

How about his oratory skills?

“Parsing Mr. Greenspan’s words is a rare pleasure — for a masochist. His speeches often read as if they were written by Henry James on a bad day.”

(Barron’s columnist Alan Abelson, October 1999)

Does Mr. Greenspan agree with this assessment?

“Since becoming a central banker, I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.”

(In 1997)

After nine years of a booming economy, will the good times ever end?

“There is no evidence that the business cycle has been replaced.”

(In 1997)

Finally, what about the state of the U.S. stock market?

“We partially broke the back of an emerging speculation in equities. The stock market, in my judgment, is still a little rich.”

(In 1994)

Originally posted on August 22, 2000

Updated on June 25, 2001