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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

31 January 2006

Greenspan-style

Two articles in the Wall Street Journal, an editorial and an op-ed by Milton Freedman, capture Alan Greenspan’s legacy; Milton Friedman writes: “Over the course of a long friendship, Alan Greenspan and I have generally found ourselves in accord on monetary theory and policy, with one major exception. I have long favored the use of strict rules to control the amount of money created. Alan says I am wrong and that discretion is preferable, indeed essential. Now that his 18-year stint as chairman of the Fed is finished, I must confess that his performance has persuaded me that he is right -- in his own case” (1).

And the editorial: “The paradox of Alan Greenspan's achievement as he leaves office today after 18 years as Chairman of the Federal Reserve is that nearly everyone is praising his performance but no one seems to know exactly how he did it. He bequeaths to successor Ben Bernanke a record but not a method -- which means we all have to see if the new guy has the same juggling skills” (2).

Both these comments convey neatly Mr. Greenspan’s legacy as well as the natural skepticism which ensues about his successor’s ability to manage so subtle and cryptic a task as monetary policy.

References:
(1) “‘He has set a standard’,” Wall Street Journal, 31 Jan 06
(2) “The Chairman’s Mystique,” Wall Street Journal, 31 Jan 06

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