Harry Reid Calls Alan Greenspan a “Hack”
Senate Democratic Leader Blasts Greenspan (WaPo, A06)
Federal Reserve Chairman Alan Greenspan generally gets accolades for his public pronouncements. Yesterday he got a brickbat from Senate Minority Leader Harry M. Reid (D-Nev.), who blasted Greenspan as “one of the biggest political hacks we have here in Washington.”
Reid ripped Greenspan during an interview on CNN’s “Inside Politics.” He said the Fed chairman has given President Bush a pass on deficits that have built up in the past four years and should be challenging Republicans on their fiscal policies, rather than promoting Bush’s plan to introduce personal accounts into Social Security. “I’m not a big Greenspan fan — Alan Greenspan fan,” Reid said when asked about the Fed chairman’s testimony this week urging Congress to deal quickly with the financial problems facing Social Security and Medicare. “I voted against him the last two times. I think he’s one of the biggest political hacks we have in Washington.”
I have long found Greenspan annoying, because he seems to have appointed himself the oracle of all things economic, when his job is merely to tweak monetary policy to prevent inflation and moderate recessions. Still, he is by most accounts exceedingly good at what he does, as evidenced by his continual reappointment by presidents of both parties.
Duncan “Atrios” Black agrees with Reid, saying, “I’m glad the Democrats have realized that Greenspan is part of the problem.” He doesn’t elaborate other than PhotoShopping the cover of Woodward’s Maestro to Hack.
Ezra Klein apparently concurs, although his analysis is tactical: “Don’t underestimate the power of this move. It looks a bit intemperate, and it’ll certainly be judged so by the usual lineup of basic cable gasbags, but Reid has shattered the consensus that St. Alan is above reproach.” He does share my irritation at Greenspan’s tendency to pontificate, which he dubs “grave, opaque utterances he intones from atop Sinai.”
Matt Yglesias also agrees with me that Greenspan has done his actual job quite well and that “Insofar as people have complaints about the man, it overwhelmingly concerns his freelancing as a fiscal policy analyst. “
Betsy Newmark, on the other hand, thinks Reid is living in a fantasy land.
Do the Democrats really believe that stuff about how Clinton’s tax increase helped bring about the balanced budget? THey need to reread a history of the economy in the 90s and note that the economy started to improve after the Republicans took over control of Congress in 1995, not after Clinton’s 1993 tax increase. Unlike Bush’s 2003 tax cut which almost immediately sparked economic growth, Clinton’s tax increase did no such thing.
Personally, I contend that the boom of the ’90s had much more to do with the dot.com boom and other developments totally unrelated to government than anything Clinton, Greenspan, or Gingrich did. But that’s a debate that we’ll never settle.
Ultimately, I’d disagree with Reid that Greenspan is a “hack” but also would like to see him go once his term is up. I don’t like to see anyone, especially someone unelected, remain in such a powerful position that long because they build up too much institutional power. Even though I often agree with him, I don’t want the Fed Chairman being the ultimate arbiter of issues like Social Security reform or other issues of macroeconomic policy.
I don’t agree that Greenspan is a hack but I do think that his paranoi about inflation contributed to the economic collapse in 2000. He had what, 12 interest rate hikes from 99 into 2000? He could have had 6 and the dot coms probably would have still imploded but the affects on non-tech businesses wouldn’t have been as disastrous.
The interest rate hikes did have an impact, but I think it was more in further driving up the value of the dollar which made American companies a lot less competitive at home and abroad, thus reducing profits and making P/E ratios become higher at a given stock price.
Greenspan’s “paranoia” is why he was reappointed so much. It reassures Wall Street that the gov’t is serious about controlling inflation. To do this they put in a Fed Chairman who is willing to send the economy into a recession to controll inflation. Otherwise the other option is to risk the stagflation from the 70’s.
As for Greenspan going, he is effectively gone. According to the law when his term is up, that is it he can’t be re-appointed.
The Democrats see the writing on the wall – the only way for us to “save” these federal entitlement programs that redistribute wealth (to some degree or another) is to take them back away from the federal government so we can operate them more efficiently.
This is very hard for them to accept, but reality can be that way sometimes…
It’s about the math, stupid…