The Three Faces of Alan Greenspan

[On the Road]

from Brad deLong:

---snip

...I am not terribly surprised that Greenspan has not been helpful--according to my lights of helpful--on fiscal policy. For Alan Greenspan is three-faced. He is:

-The superb monetary policy technocrat
-The Randite--the long-time disciple of Ayn Rand--who believes that in a good society government spending would be less than 5% of GDP.
-The Republican team player.

The Greenspan we saw for the most part in the 1990s was the superb monetary technocrat--the person who maintained low inflation and yet nudged the U.S. economy closer to full employment than I would ever have believed possible, and the person who was desperate for a balanced budget because persistent unbalanced budgets generate enormous pressure on central banks to allow inflation.

But there's also the Greenspan who believes that the social insurance state is fundamentally illegimate: an offense to human dignity and a long-run policy disaster. He wants a balanced budget, but he wants spending cuts much more than tax increases.

http://www.j-bradford-delong.net/movable_type/2005-3_archives/000482.html

[Demeter]

1. I Thought He Was "See No Evil, Hear No Evil, Speak No Evil"!

[ladjf]

2. Greenspan has rendered himself irrelevant.

[stevebreeze]

3. The only time Greenspan let unemployment fall was after the Asian

crises. This was an accident. He firmly believed in non accelerating inflation rate of unemployment(NAIRU). He intentionally left kept interest rates high to prevent wage growth. Interest rates were lowered, and wages grew only when Greenspan lowered rates to prevent the Asian crises from spreading. The lower unemployment was only an accidental side-product of his saving bankers asses. It did prove that NAIRU was a pile of shit! We have to be careful of price wage inflation not wage price inflation.