A Speech We'll Never Hear from Alan Greenspan

By Richard W. Stevenson N. Y. Times News Service | THE JOURNAL RECORD, February 22, 1999 | Go to article overview

A Speech We'll Never Hear from Alan Greenspan


Richard W. Stevenson N. Y. Times News Service, THE JOURNAL RECORD


WASHINGTON -- Despite his reputation for deliberate opacity, Alan Greenspan, the Federal Reserve chairman, actually speaks quite directly about the outlook for the economy and interest rates. Still, there may be limits to any Fed chairman's forthrightness. Rest assured that when he goes before the Senate Banking Committee on Tuesday for the first round of this year's Humphrey-Hawkins testimony, he will not say the following, no matter how much he might want to.

Thank you. I always enjoy this opportunity to indulge members of Congress in the fantasy that they understand monetary policy, and to prepare Wall Street for the next trick up my sleeve.

Let's start by reviewing 1998. You might remember me saying in September that no nation could remain an oasis of prosperity unaffected by what was going on in the rest of the world. Boy, was I wrong! Japan remains in the tank, and the rest of Asia is only starting to breathe on its own. Emerging economies from Russia to Brazil are already in free fall or teetering on the brink. Europe is doing nothing to help, and may itself be headed for a downward slide. Yet the American economy is not only shrugging off the rest of the world's woes, it is also showing remarkable strength. The economic growth rate in the fourth quarter -- 5.6 percent, annualized -- may wind up being revised downward somewhat. But heading into 1999 the United States was not just an oasis, it was a veritable economic Garden of Eden. Speaking of sin, I'll confess to my own. That last interest rate cut -- the quarter-point reduction in the federal funds and discount rates in November -- was a mistake. The economy certainly didn't need it. And while I'm sure my central-banker friends around the world appreciated it, its main effect at home was to send stocks higher. I really should have held off, keeping that quarter point in my ammo belt just in case Brazil melts down or some other conflagration breaks out in the global financial system, and we need another shot of monetary easing. Now, if I have to cut rates further, Wall Street is going to spurt up into cloud-cuckoo-land. Everyone knows my feelings about equity valuations, but let me try this one more time: You people are bonkers if you think earnings are going to hold up over the next year, much less increase at a double- digit pace. So if you're buying on the basis of price-to-earnings multiples, stop deluding yourselves -- you're all day traders now. Since we central bankers have to consider all the possibilities, let's look at another: that growth remains so strong this year that the hawks start agitating for a rate increase to head off any chance of inflation taking root. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Speech We'll Never Hear from Alan Greenspan
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.