Greenspan and Fairness = Oil and Water

Here’s some rather sad news. We’ve spoken quite often of the evil that the Federal Reserve Board and its chairman, Alan Greenspan, poses to real Americans (as opposed to the government’s real owners, Corporate America). We’ve spoken of how Greenspan happily puts hundreds of thousands and even millions of Americans out of work in order to protect the wealth of those who need the protection the least. We’ve spoken of how he so fears inflation or stagnation or recession or even a growing economy that he gleefully raises interest rates for no reason that an intelligent person might recognize.

Now we learn that every single indicator that Greenspan supposedly uses to justify raising interest rates or lowering them have become completely useless.

First, he is so fearful that the economy is, in his view, over heating that he has raised interest rates four times in the last nine months but the economy has only grown hotter and larger, even though hundreds of thousands have either found themselves out of a job or with little power to ask for living wages or new benefits due to those raises.

Greenspan is also convinced that inflation is about to explode upon the world scene but is finding it nearly impossible to convince Congress or anyone else outside his board. Nevertheless, he has increased rates four times without the slightest shame.

He claims that uncontrolled speculation in technology stocks will cause the market great problems but many experts now state that the interest rate hikes he is so fond of have actually increased speculation in those stocks.

He has repeatedly stated that he only sees a desirable level of unemployment but sees no level that the market might reach which is, in his words, “desirable”. Nevertheless, he has cited his fear of too high a market value to explain those increases.

Finally, he says that he wants to increase rates yet again, this time so that the wealthy will not spend their stock profits so readily, fearing that this spending will increase the demand for goods which will result in a greater demand for skilled labor which will result in the unthinkable; higher wages and better benefits. In fact, his fear is that ,”These higher expectations (due to over valued stocks), in turn, not only spur business investment but also increase stock prices and the market value of assets held by households, creating additional purchasing power for which no additional goods or services have yet been produced.”

Think about that last statement, folks. Greenspan has often been on record as saying that unemployment must increase in order to keep that horrible inflation away all the while knowing that his actions result only in more households having no income while the value of stocks constantly rise on the news of higher unemployment. Suddenly, he’s worried that households might find themselves with excess income which might result in a greater demand for goods and services not yet produced (meaning that they must be produced to meet the supply/demand cycle) which, in turn, would reduce unemployment and give greater power to the employed to demand decent wages and benefits.

What all of this actually means, as well, is that while Greenspan gets the vast majority of the credit for the nine year increase in the value of the stock market, his constant warnings about inflation and over heated markets where none exists can only greatly limit his control should the market actually slow or should the market be affected by any sudden shocks like the last crisis in the Asian markets.

His power may become limited, in any event, in that economists from nations not so wedded to the wealthy have began criticizing his actions as nullifying the true benefits of the increased productivity that the greater demand for goods and services result in. Calling increased productivity “an unalloyed blessing”, Edward Yardeni, economist for Deutsche Bank, has flatly stated that, “Productivity is what drives real income. It goes straight to what we care about.” (1)

Obviously, what intelligent economists care about doesn’t even appear on Greenspan’s limited radar. If the average American benefits with an increase in wages or an increase in the power to demand that increase, then something must be done quickly to end that terrible cycle.

Folks, among the first acts that we must establish once we have retaken the ownership of our government away from the wealthy and Corporate America is that all federal monetary policies must first take into account the affects on real Americans and then, only second, its influence on Corporate America and its wealthy owners. Only then will we, the real Americans, find ourselves with a future that is as bright as that envisioned by our founding fathers. Only then will we no longer be the tool that the government uses to insure that the wealthy remain that way, no matter the cost to us.

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Copyright 3/30/2000