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Saturday, February 11, 2006

Those whom the gods wish to destroy they first make a newspaper columnist. Most columnists start off with a bag full of ideas and endless energy. But the job begins to weigh on even the most talented journalist. He starts writing columns about columns he's written, about his kids, or about the deaths of relatives. He composes columns as open letters to world leaders—or writes from inside their heads. He quotes cab drivers. His columns become more assertion than argument. Finally, he starts picking silly, protracted fights with other media machers.
Thanks to Chris Masse for the link.

Posted by Donald L. Luskin at 10:51 PM | link  

Friday, February 10, 2006

KRUGMAN TRUTH SQUADS HIMSELF   Gotta love the first two lines of Paul Krugman's column today, as he seems to anticipate correction of a typically just-slightly-exaggerated statistic:
At this point we've had six years to grow accustomed to Bush budget chicanery. (Yes, six years: George W. Bush's special mix of blatant dishonesty and gross irresponsibility was fully visible during the 2000 presidential campaign.)
Our relentless crusade to hold him to the truth has resulted in him holding himself to truth -- to the extent that his columns aren't even interesting anymore. What could he say that's interesting if he can't lie anymore?

Posted by Donald L. Luskin at 3:32 PM | link  

NO DIVERSITY AT THE FED   The liberal academic economics mandarinate rejects the diversifying presence of an outsider on the Federal Reserve Board of Governors. According to Bloomberg:
Bush's nomination of the 35-year-old White House aide -- a lawyer by training who would become one of only two members of the Fed's seven-member board of governors without a Ph.D. in economics -- has been greeted by criticism and bewilderment by some former Fed officials and economists. They point to his political connections and inexperience, and say the White House could have found a better-known, more qualified choice.

``Kevin Warsh is not a good idea,'' said former Fed Vice Chairman Preston Martin, who was appointed by Ronald Reagan in 1982. ``If I were on the Senate Banking Committee,'' which must approve Fed nominees, ``I would vote against him.''

Heaven forfend that anyone with real world experience should sit on the board that governs the government agency which, more than any other, influences the American economy. Thanks to our correspondent "Irrational Exuberance" for the link.

Posted by Donald L. Luskin at 9:57 AM | link  

Thursday, February 09, 2006

DUNG FROM THE TIMES   The New York Times really has outdone itself for sheer hypocrisy. Is it lack of self-awareness? Or the arrogance of full awareness but no conscience? From their editorial Tuesday about "Those Danish Cartoons":
The New York Times and much of the rest of the nation's news media have reported on the cartoons but refrained from showing them. That seems a reasonable choice for news organizations that usually refrain from gratuitous assaults on religious symbols, especially since the cartoons are so easy to describe in words.
Yet on the same day, the Times ran a "Critics Notebook" story about the cartoons, and it featured a full color reproduction of the infamous "Dung Mary," which the Times easily described in words as "a collage of the Virgin Mary with cutouts from pornographic magazines and shellacked clumps of elephant dung."

Jim Glass goes on to point out that the hypocrites use the opportunity to accuse (of course) the Bush administration of hypocrisy:

...hypocrisy [is] now endemic in the culture wars. Last week a State Department spokesman, Sean McCormack, simultaneously condemned the cartoons as "unacceptable" and spoke up for free speech, while the Joint Chiefs of Staff were firing off a letter to The Washington Post about a cartoon it ran in which Defense Secretary Donald H. Rumsfeld, in the guise of a doctor, says to a heavily bandaged soldier who has lost his arms and legs, "I'm listing your condition as 'battle hardened.'" The letter called the cartoon, by Tom Toles, "reprehensible" and offensive to soldiers.
Update [2/10/2006]... The New York Times was too respectful of Islam to publish these images -- but it turns out they were published by a newspaper in Egypt last October, and on the front page. No riots there. Hmmmm.... Thanks to reader Michael Marx for the link.

Posted by Donald L. Luskin at 2:04 PM | link  

COMPETITIVENESS: CALL THE TRADE COPS   Our DC "lawyer lobbyist" friend (anon again), is given hope by this sophisticated move toward free trade:
I read this story from today’s Congress Daily. Two Democratic Senate candidates, one in Maryland, one in Ohio, think the answer to competitiveness is to get an “independent” (i.e. controlled by Congress, not the President) agency to more aggressively pursue trade “violations.” Not education. Not investment. Not innovation. But more lawyers.

Lost in all this saber-rattling is the truth that if we remove the market’s pressure to stay competitive (or, worse yet, subsidize failure) we’ll all sink. Yet, violations of trade laws are common; ask anyone with a copyright. Are they the cause of job losses? Sometimes, but proving trade violations is a legally complicated matter.

Who would this “independent” congressional board displace? Among others, it would undermine the work of skilled lawyers like Bob Zoellick, now Deputy Secretary of State and formerly USTR. Progress is slow, as is usually the case with international diplomacy. “Winning” comes from getting the facts exactly right, persistence and leverage. As John Kerry might say, it’s nuanced.

Does anyone with experience think that a headline-hungry, Spitzer-style free-range prosecutor is the answer to trade disputes? Golly, maybe these Congressmen are just pandering to voters in heavily unionized states to rally support for their Senate campaigns. The bill will go nowhere, of course, but only because the Democrats are in the minority now. On top of all that, it is clearly unconstitutional – a congressional office cannot usurp executive duties to enforce the law.

Wouldn’t it be amazing if the Democrats took on the terrorists with the kind of zeal they muster in the fight against Turkey rice.

Posted by Donald L. Luskin at 12:05 PM | link  

Wednesday, February 08, 2006

CONSERVATIVES CAN THINK THE WORLD IS ENDING, TOO   My DC "lawyer/lobbyist" friend, who as always demands anonymity, hasn't exactly been drinking his cheerful juice. Here are his ruminations about how success might beget disaster:

Here’s something to think about: if the Democrats retake Congress, it will make Maryland’s union-backed punitive attack on Wal-Mart look like a small ripple. Here’s the scenario:

  • Economy is strong and growing
  • Shareholders are benefiting with growth in equities and low-tax dividends
  • Business is benefiting and although competition is tough, capital is easy to raise
  • Employees are benefiting and unemployment is low
  • Terrorism and terrorists are under siege worldwide
  • Entire free world is counting on US to win GWOT, but we have to win the peace largely by ourselves
  • Bush has reestablished his footing, and is avoiding the many missteps of 2005
  • Congressional Republicans now have a real leader in John Boehner
  • Democrats are desperate to reverse items one through 8
  • Voters sometimes get pushed by the winds into making the wrong choices
  • House majority is said to be “in play”
  • Senate majority is said to be “in play”
  • What happens if the Democrats win both houses?
    • First, they don’t have to win both Houses, they only need to win the House with its structured rules of debate and constitutionally-provided primacy on spending and taxes; the Democrats must come close in the Senate to forge a working majority with liberal Republicans like Snowe (or bewildered ones like Voinovich.)
    • Democrats will pass “even tougher” lobby “reform” in part to repay the New York Times and their many media fellow travelers who blew the hot air; the ulterior motive will be shield themselves from the effective defense of business interests against the assault on corporations, employers and anyone who has prospered because of their own hard work and skill.
    • Watch out if you are employed by, or are a customer of the following industries:
      • Oil and gas
      • Pharmaceuticals or medical device manufacturers
      • Doctors, nurses, hospitals
      • Automobile and truck manufacturers, including vendors
      • Basic industries such as steel or chemicals
      • Homebuilders, realtors, mortgage brokers
      • Investment bankers, brokers, commercial bankers, credit card issuers, insurance underwriters or brokers
      • Any other finance company
      • Capital intensive service industries such as telephone, cable, wireless, internet equipment manufacturer
      • .all other lines of employment

Have a happy day!

Posted by Donald L. Luskin at 11:37 AM | link  

DANGEROUS IDEA... BUT INTERESTING...   Coup d'Etat guru Edward Luttwak in the Wall Street Journal:
The bombing of Iran's nuclear installations may still be a bad idea for other reasons, but not because it would require a huge air offensive. On the contrary, it could all be done in a single night...

Iran might need 100 buildings in good working order to make its bomb, but it is enough to demolish a few critical installations to delay its program for years -- and perhaps longer because it would become harder or impossible for Iran to buy the materials it bought when its efforts were still secret. Some of these installations may be thickly protected against air attack, but it seems that their architecture has not kept up with the performance of the latest penetration bombs.

Nor could destroyed items be easily replaced by domestic production. In spite of all the claims of technological self-sufficiency by its engineer-president, not even metal parts of any complexity can be successfully machined in Iran. More than 35% of Iran's gasoline must now be imported because the capacity of its foreign-built refineries cannot be expanded without components currently under U.S. embargo, and which the locals cannot copy. Aircraft regularly fall out of the sky because Iranians are unable to reverse-engineer spare parts.

Posted by Donald L. Luskin at 1:35 AM | link  

HERE'S AN "INCENTIVE" -- I WON'T KILL YOU   Economist George Reisman, author of Capitalism, nails the New York Times on its corrupt and misleading use of econospeak in its Monday editorial on Bush's energy proposals:
In a bizarre corruption of the concepts of “incentives” and “market,” it attacks the president for failing to propose the kind of “program” it wants.
But the biggest shortcoming is the total absence of a program that would deliver any of these dandy new technologies to the marketplace. By program we mean a uniform set of incentives — what the economists call market signals — that would drive American industry to build the more fuel-efficient vehicles and the cleaner power plants that we need.

For vehicles, there are two ways to get there. One, favored by most research groups specializing in energy, is to greatly strengthen the fuel-economy standards for cars and trucks. The other, favored by many economists, is to enact a substantial gas tax. We like both. One way or another, through regulatory or market mechanisms, the country would soon be driving cars that were far more fuel-efficient.

The kind of “incentives” The Times wants the president to offer is greater use of the “incentive” to avoid being fined or imprisoned. That’s what will make the auto industry achieve greater “fuel-economy” and the utilities build power plants different from the ones they would otherwise build. Yes, in some cases, it also wants the government to offer money—subsidies. But the money is taken from taxpayers, who are given the “incentive” of staying out of jail as their reason for paying the additional taxes that will provide that money. And additional taxes, of course, is exactly what The Times asks for.

In its view, higher fuel prices resulting from higher taxes constitute using the “market mechanism” to provide a “market signal” to consume less fuel. Here The Times casually neglects the fact that the “market” that has a “mechanism” and provides “signals” is the market free of government coercion—that is, free of precisely what The Times wishes to introduce into it.

The Times idea of a “market mechanism” and a “market signal” is comparable to a dictator’s notion of the role of the press in the publication of election results. The dictator wants to use the press to announce his version of the outcome of the election.

Posted by Donald L. Luskin at 1:08 AM | link  

Tuesday, February 07, 2006

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Ever wonder where congressional pork comes from? Here's the answer, in the form of a memo liberated by our Senate staffer friend (who, for obvious reasons, wishes to remain anonymous). As he explains, "It's from the appropriations committee staff to all staffers who handle appropriations for their bosses. It's basically the request for pork requests: 'Hey everybody, send us your pork projects before this date, throw in a line or two about what the project does, and we'll make sure your pork gets funded.'" The sentence highlighted in pink below was one that my friend thought was particularly hilarious.

Labor, Health and Human Services, Education, and Related Agencies
Republican Request Format for FY'07

Ø The due date for member requests is April 5, 2005 [sic].

Ø Please submit both your Senator’s state specific projects ($1 million for Smith Hospital, etc.) and line item programs contained in the budget ($5 billion for LIHEAP, etc.).

Ø Submit all requests in letter form. In addition submit the Senator’s state specific project priority list, as well as line item program priorities, electronically. (Note the distinction between projects and programs.) If it is a programmatic request please insert PROGRAM-- (in all caps with the dashes) before the name of the grantee or program. Guidelines for the letter and electronic formats are below.

Ø Please be realistic regarding your project priority list. You should not have 50 project priorities. Remember, these lists will be held confidential by the committee.

Ø If your Senator is requesting language, please include the language in a separate word file or e-mail.

Ø Disks with a copy of the electronic database will be made available in SD-184. With the disk will be a packet of project guidelines on what can and cannot be funded.

Ø If you have any questions regarding member requests, please feel free to contact Candice Ngo (formerly known as Candice Rogers) at 4-7262. This form is for Majority members only, if you have any further questions about the Minority requirements please contact Adrienne Hallett at 4-3806.

Electronic Database:

· Save the access file onto your computer, do not launch it from a disk or e-mail.

· Open the file and fill out a form for each request.

· You MUST fill in all blank spaces! All incomplete forms will be returned to your office.

· After you have filled in all the spaces you click on the “Next” button and proceed to the next form.

· These can be edited and updated.

· If you would like to delete an entire record, click on the “View Table” button and select the row it’s in by clicking on the gray button on the very left hand side of the screen, then hit “Delete.” There is no retrieving this data once it is gone. Be careful!

· When you close the database it will automatically save all of the records you have inputted.

· Then save it back onto the disk or burn it onto a CD and return it to Candice in SD-184.


· Include all of the information in the letter that you would on the electronic form.

· Specifically you should include in a block at the top of the letter:

o Member

* Note: If this is a joint request please enter one member, a slash, then the second member. (ie. Specter / Harkin)

o Staff Contact

* Include your DIRECT number, not your main office number.

o Agency

o Account

o Request Amount

o Legal Grantee Name and Statement of Purpose

* (ie. Temple University, Philadelphia, PA to expand academic support services for undergraduate students)

* Note: You MUST put the legal name of the grantee organization (whoever gets the money) first on the letter!

· After the header include:

o A one to two paragraph description of the project.

o A detailed statement of purpose.

* Include exactly what the money will be used for, such as curriculum, renovation, construction, etc. Please review acceptable uses of federal dollars for each account.


Posted by Donald L. Luskin at 7:33 PM | link  

NEW LOWS FOR THE DEFICIT!   The fertile mind of Daniel Clifton at American Shareholders Association has produced a wonderful report showing the positive economic and market impacts of the 2003 tax cut on dividends and capital gains. Daniel also sent me a wonderful chart that doesn't appear in the report -- showing that the federal budget deficit is actually lower now than it was when the tax cuts were enacted in 2003. We know that's not because government is spending any less money, so it must be because government is taking in more tax revenues -- thanks to lower rates!

Posted by Donald L. Luskin at 12:47 PM | link  

HOW ABOUT A NOBEL PRIZE FOR GETTING IT RIGHT FOR A CHANGE?   Per Ahlmark, the former deputy prime minister of Sweden , in today's Wall Street Journal:
Did the Norwegian Nobel Committee realize the gathering storm in Iran when it last year decided to give its peace prize to the IAEA? ...It's time to express admiration of personalities who have not been cheated by the Iranians. That's why I have nominated two Americans for the Nobel peace prize for 2006. One is an independent researcher who never gave up his quest to uncover the truth, the other a government official. Separately, but on parallel tracks, they have been alerting us that a tremendous threat to peace is in the offing.

Kenneth Timmerman has for 20 years exposed Iran's nuclear intentions. In books, reports, speeches, articles and private meetings he has told us of specific detail as well as the big picture -- a full-fledged, official plan to game the system of international safeguards. His latest book, "Countdown to Crisis: The Coming Nuclear Showdown with Iran," lays this out in chilling detail; and it was his report for the Wiesenthal Center in 1992 that first detailed Iran's ties to Pakistani nuclear scientist A.Q. Khan.

John Bolton, former undersecretary of state, has with unusual energy tried to find ways to counter this threat. ...He has repeatedly underlined the threat of Iran pursuing two paths to nuclear weapons: One is the use of highly enriched uranium, achieved by thousands of centrifuges, which Iran has developed and tested. A large buried facility at Natanz is intended to house up to 50,000 centrifuges. Iran resumed activities there just four weeks ago (in direct defiance of the IAEA). The second is through plutonium. Mr. Bolton knows that a heavy-water production plant and the Bushehr light-water reactor can be exploited as cover for sensitive nuclear fuel cycle activities. He says another "unmistakable indicator" of nuclear intentions is Iran's habit of "repeatedly lying to and providing false reports to the IAEA."

Posted by Donald L. Luskin at 9:11 AM | link  

TRUST THE MARKET, TRUST YOURSELF   The renegade New York Times columnist John Tierney speaks for me on "energy policy." In a word, the only policy we need is the market -- and liberation from politicians who play on our fear and guilt about oil. Here's Tierney:
When something finally comes along that's cheaper and more reliable than oil, no national energy plan will be necessary. Capitalists will be ready to sell it to eager American drivers. For now, the best strategy is to buy gasoline and stop worrying that it's sinful or dangerous.

After you fill up your tank, twist the rear-view mirror so you can gaze at yourself. Repeat these words: "I'm good enough, I'm rich enough, and doggone it, people in the Middle East like my money."

Posted by Donald L. Luskin at 8:53 AM | link  

Monday, February 06, 2006


Posted by Donald L. Luskin at 1:32 PM | link  

Sunday, February 05, 2006

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Here's my column for this week, talking about Alan Greenspan's on-again/off-again relationship with gold. I make reference to Greenspan's famous essay "Gold and Economic Freedom" (from the Ayn Rand anthology, Capitalism: The Unknown Ideal). Our pseudonymous correspondent "Irrational Exuberance" reminds me that the indomitable Congressman Ron Paul asked Greenspan about that essay about a year ago during congressional testimony. Here is the exchange between Paul and Greenspan, and my column follows.

2/17/05 (Political Transcripts by Federal Document Clearing House)

RON PAUL (R-TX): Thank you, Mr. Chairman.

Mr. Greenspan, yesterday you were quoted as saying it was imperative that the Congress restore fiscal discipline. And of course you've made that point, I think, very often over the years.

I have tried my best to vote accordingly, but sometimes I find myself in a lonely category.

I have found that we have a group here that is quite willing to vote for deficits for domestic programs. Then we have another group that's quite willing to spend for militarism abroad. Then we have another group that likes both.

So if you look around for people who are willing to maybe cut in both areas, it's pretty hard to come by.

But you in the past, in answer to some of my questions, have answered that you believe that central bankers have come around to getting paper money to act in many ways just like gold, and therefore there was less of an imperative for a gold standard.

I haven't yet been convinced of that. Take, for instance, the current account deficit. You know, under gold standard there's a lot of self-adjustments, and we certainly wouldn't have the exchange rate distortions between the renminbi and the dollar.

So I think there's a lot of shortcomings under the paper standard with the current account deficit.

Also, although the argument is made that CPI reflects that there's little or no inflation, that if you look at the price of bonds or if you look at the cost of medicine, if you look at the cost of energy, there's a lot of price inflation out there.

And also, if you look at the cost of houses, which are skyrocketing, which then is reflected into tax increases, the consumer is still suffering from a lot of price inflation that we in many ways in Washington try to deny. But I think in an effort to discipline the Congress, that the Federal Reserve would have a role to play as well, because in many ways the Federal Reserve accommodates the spending, because you're capable of buying bonds. And when you buy our debt that we create, you do it with credit out of thin air.

So it is that facility of the monetary system that literally encourages or actually tells the Congress they don't need to be disciplined, because there's always this fallback that we don't have to worry, the money's out there, which would not be available, obviously, under a gold standard.

I would like to quote from a famous economist that sort of defends my position. He says, in almost a hysterical antagonism toward the gold standard, "It is one issue which unites statists of all persuasions. Government deficit spending under a gold standard is severely limited.

"The abandonment of the gold standard made it possible for the [welfare] statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds."

Further stating, "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.

"If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

And, of course, I'm sure you recognize those words because this is your argument.


PAUL: And I would say that isn't it time that, if we ever get concern about our deficit spending and we consider it a real imperative, why shouldn't we talk about serious monetary reform?

Do you think that the gold standard would limit spending here in the Congress?

GREENSPAN: First of all, that was written 40 years ago, and I was mistaken in part. I expected things that didn't happen. And, nonetheless, my general view toward the type of gold standard effect remains to this day. My forecast of what was going to happen subsequent to that period has proved, fortunately, wrong.

And as I've said to you in the past, we have tried to manage the Federal Reserve over the years, really since October 1979 -- because, remember, up to that point we were in some very serious inflationary trouble. Since then I think we have been remarkably successful, in my judgment.

OXLEY: Gentleman's time has expired.

GREENSPAN: And while I still think that the gold standard served us very considerably during the 19th century, and mimicking much of what the gold standard does is what we do today, I think in that context so far we have maintained a stable monetary system. And I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.

So many stories been written this week about Alan Greenspan on the occasion of his retirement as chairman of the Federal Reserve, my saying anything more is like throwing a log on a fire that is already blazing. But I have some views about the Maestro's tenure at the Fed that are quite different than anything else you've probably read — so here goes.

Most of the stories about Greenspan this week have been quite flattering, many crediting him for the era of general prosperity that occurred under his leadership of the Fed. I've noticed that several stories have referred to him as "the greatest central banker who ever lived." At the same time, there have been a fair number of stories that have focused on some of the ways in which he failed.

But I haven't seen a single story that was able to pin down exactly why Greenspan succeeded, or why Greenspan failed. Love him or hate him, everybody seems to be mystified by what moved him to do what he did. It seems everyone has concluded that Greenspan was either operating on some secret formula known only to himself, or on the basis of some ineffable instinct.

It wasn't instinct. It was a formula. When Greenspan followed the formula, markets were stable. When he failed to follow it, markets went into crisis.

The formula wasn't a secret. Greenspan talked about it openly. But it was so simple, nobody who heard it realized what he was hearing.

I can tell you the formula in just a single word of only four letters: gold.

When Greenspan was a young man, he was part of the inner circle of Ayn Rand, the novelist, philosopher, and radical advocate of laissez-faire capitalism. In 1967 he wrote a chapter for Capitalism: The Unknown Ideal — a Rand anthology — extolling the virtues of a gold standard:

" and economic freedom are inseparable... the gold standard is an instrument of laissez-faire and... each implies and requires the other.

"...In the absence of the gold standard, there is no way to protect savings from confiscation through inflation."

Twenty years later, Greenspan took control of the world's largest manufacturer of paper money — the Fed. The irony couldn't be more complete: there is no institution in the world more completely divorced from the gold standard. And by that point, the profession of economics had completely dismissed gold as an archaic artifact of a quaint bygone era, calling it (in Keynes's term) a "barbaric relic," and consigning it to the scrap heap of economic history.

But that didn't stop Greenspan. He didn't literally revive the gold standard. But he talked frequently about gold and other commodities as sensitive indicators of inflation risk. When the gold price rose, Greenspan argued that the market was forecasting inflation — which is the decline in the value of the dollar vs. hard assets.

This view had two other friends on the Fed when Greenspan arrived in 1987. Fed Governors Manuel Johnson and Wayne Angell were both avid followers of gold and other commodity prices as inflation indicators.

Take a look at the chart below, covering the entire period of Greenspan's tenure as Fed chairman. The light blue line is the fed funds rate, the key overnight interbank interest rate determined by Fed policy. The gold line is, of course, gold — the two-year moving average price.

Note that for the first half of Greenspan's tenure, the fed funds rate closely tracked the moving average gold price. This means, simply, that whenever gold was in an intermediate-term rising trend, Greenspan was raising interest rates to head off the inflation that the gold price was warning about. When gold was in a falling trend, Greenspan lowered interest rates because gold was now warning of deflation.

This "virtual gold standard" helped Greenspan make some great decisions — which all the recent stories about his career have been at an utter loss to explain. For example, from late 1989 to early 1991, inflation was on the rise, with the consumer price index moving from 4% to 5.5%. But Greenspan was cutting interest rates during those years — because the two-year moving average price of gold was falling. And what do you know? Inflation ended up turning around and heading lower.

Greenspan abandoned his golden formula in early 1996, shortly after he gave his famous "irrational exuberance" speech and started worrying about the "wealth effect" created by elevated stock prices. The gold price started to fall in early 1997, and Greenspan responded by raising interest rates, in direct contradiction to his formula.

The result was an era of unprecedented turbulence in financial markets, starting with the Asian debt crisis, and then rolling into the Russian debt crisis, the collapse of Long Term Capital Management, the NASDAQ bubble-and-bust, and finally the monetary deflation that prompted Ben Bernanke in 2002 — when he was a Fed Governor — to talk about dropping money out of helicopters, if necessary, to right the economy.

In his last two years in office, Greenspan made the opposite mistake. With gold screaming higher, the Fed has kept interest rates too low for too long. I guarantee you that the result over the next several years will be a great deal more inflation than anyone expects now — and a lot more market turbulence.

I have no idea what prompted Greenspan to abandon his "virtual gold standard" when it had been such a winning formula for so many years. If Bernanke is reading these words, I invite him to consider this explanation of the Greenspan era at the Fed, and to put Greenspan's formula into service once again.

Posted by Donald L. Luskin at 11:34 PM | link