It’s Greenspan week!!
Federal Reserve Chairman Alan Greenspan is a newsmaker — whenever he opens his mouth, it makes the news (even if no one quite understands what he’s saying). That said — and I’ll be willing to concede that this may be my imagination — he seems to be opening his mouth quite a bit this week: ...
Federal Reserve Chairman Alan Greenspan is a newsmaker -- whenever he opens his mouth, it makes the news (even if no one quite understands what he's saying). That said -- and I'll be willing to concede that this may be my imagination -- he seems to be opening his mouth quite a bit this week: Five days ago, he gave a speech blasting the rising sentiment for protectionism and calling for greater investments in education:
Federal Reserve Chairman Alan Greenspan is a newsmaker — whenever he opens his mouth, it makes the news (even if no one quite understands what he’s saying). That said — and I’ll be willing to concede that this may be my imagination — he seems to be opening his mouth quite a bit this week:
To be sure, many of our fellow citizens have experienced real hardships in our economic environment, which is becoming ever more internationally competitive. But the protectionist cures being advanced to address these hardships will make matters worse rather than better. The loss of jobs over the past three years is attributable largely to rapid declines in the demand for industrial goods and to outsized gains in productivity that have caused effective supply to outstrip demand. Protectionism will do little to create jobs; and if foreigners retaliate, we will surely lose jobs. We need instead to discover the means to enhance the skills of our workforce and to further open markets here and abroad to allow our workers to compete effectively in the global marketplace.
Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to deal with the country’s escalating budget deficit by cutting benefits for future Social Security retirees. Without action, he warned, long-term interest rates would rise, seriously harming the economy…. Greenspan, who turns 78 next week, said that the benefits now received by current retirees should not be touched but he suggested trimming benefits for future retirees and doing it soon enough so that they could begin making adjustments to their own finances to better prepare for retirement. Greenspan did not rule out using tax increases to deal with the looming crisis in Social Security, but he said that tax hikes should only be considered after every effort had been made to trim benefits. “I am just basically saying that we are overcommitted at this stage,” Greenspan said in response to committee questions. “It is important that we tell people who are about to retire what it is they will have.” He warned that the government should not “promise more than we are able to deliver.” While the country is currently enjoying the lowest interest rates in more than four-decades, Greenspan warned that this situation will not last forever. He said financial markets will begin pushing long-term interest rates higher if investors do not see progress being made in dealing with the projected huge deficits that will occur once the baby boomers begin retiring.
The more Greenspan clears his throat like this, the more the current occupant of 1600 Pennsylvania Avenue is going to get nervous.
UPDATE: Hey, it wasn’t just my imagination, according to the Chicago Tribune:
When Alan Greenspan speaks, others listen. They usually just don’t understand. The Federal Reserve chairman is famous for his opaque remarks and abstruse topics. His interpreters even have coined a term for it: Greenspeak. But a more plain-spoken Greenspan has been on display this week.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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