Mr. GreenSpan's Rose Colored Specsgreenspun.com : LUSENET : Gore 2004 : One Thread
A lot of us say Alan Greenspan shouldn't be painting a rosy pictorial of the economy at present. In his defense I say this. As Federal Reserve Chairman his job is to try to keep this economy from tanking no matter who is in the White House. He can't help that our current president likes to reduce surpluses, raid funds like Social Security, and run huge fat red ink deficits. His job is to try to prevent mass panic among the business sectors, and to keep people from running on the bank. Therefore any good news that he does see he must use to his advantage. It is the White House and not the Federal Reserve that likes to run this nation in the "red" for big business interests such as Enron.
Anyone who says deficit spending doesn't hurt this country has a short memory. Go back to the 700 point crash in 1987. It hurt the market when the Dow sat at a much lower rate, and led to a later recession inherited by Bush Sr. that brought forth the bad unemployment we had then. To prove I am not blaming Reagan for anything I say this. He was a grand old man, but he had a bad habit of delegating authority down the line to those who were not as reputable as he tended to be. I give him credit for bringing down the Soviet Union, but those below him made a mess of things. That is why we ended up with Iran-Contra. Those below him include Bush Sr., Meese,and of course let us not forget Ollie North who was used as a pawn in this game of cat and mouse.
We also tend to forget items like the S & L Scandal, and the Keating 5. Whenever the government puts an opaque veil over what they are doing to hide facts the public should be wondering what is happening behind the curtain.
Albert Gore would never hide issues that involve all of us from public view. I have never seen him do it nor do I expect him to do so in the future. The man cares more about people than he does dollars and cents. Too bad the opposition can't do the same.
-- Mr. T (email@example.com), March 30, 2002
Just because he claims there are muddy waters ahead in this recovery. Fuel costs are the major concern especially when you talk of any kind of fighting near the Persian Gulf.
Provided something doesn't cause the market to fall like a pancake, and employment numbers actually rise significantly then there is no reason to not believe the economy will mend itself. The present market hovers around to !0,000 point mark, riding up and down on waves of defense contracts. The major point everyone watches is the price of fuel. If getting there or getting it there costs more money then rest assured the consumer accrues the costs. If something costs more then you probably won't buy it especially if you don't feel secure in your job or lost it recently. People on a shoestring don't buy products.
In the big picture this causes consumer confidence to drop. In going down this index has a negative impact on the market, and everyone knows why. It is pure common sense. No demand for a product ends up cutting production until inventories are depleted. That means if we don't buy it then it sits on a shelf until somebody does. As long as the product sits there then there is no need to have workers make more of that product, and there is no need to hire more people to retail distribute the item.
So as a result the economy stagnates. There is one good effect here, and that is so does inflation. So Mr. Greenspan doesn't have to raise interest rates right now, but he makes the implication that as long as there is nothing that will cause the present economy to go awry then it should recover soon.
Of course cutting of fuel sources due to "war" with other nations can also bring forth difficulties, but we didn't experience any problems in 1990 with fuel costs or deliveries so we should not expect problems now.
When you row through muddy & treacherous waters then caution is always a concern. With current world tensions as they sit, we can not expect Alan Greenspan to divine a rosy future just to have it fall to dust.
-- Mr. T (firstname.lastname@example.org), April 18, 2002.