Monday, January 16, 2006

Swimming Naked

The Economist's cover story for January 12, is entitled Danger Time for America and is a retrospective on Alan Greenspan and a prospective on the economy he leaves his successor. By all means check out the cover cartoon, even if you don't like economics.

Mr. Greenspan rose into the economic pantheon when the economy prospered in the 90's, but:

Mr Greenspan's departure could well mark a high point for America's economy, with a period of sluggish growth ahead. This is not so much because he is leaving, but because of what he is leaving behind: the biggest economic imbalances in American history.
...
So far as the American economy is concerned, however, the Fed's policies of the past decade look like having painful long-term costs.
Being the rotten right-wing rag it is, The Economist is too polite to mention exactly where Greenspan went wildly wrong, or the actions of his co-conspirators. Greenspan's testimony to Congress, putting his seal of approval on tax cuts with no provisions for dealing with war, disaster, or the utterly reckless and profligate spending of the GOP Congress set the disaster train in motion. He knew better, and he knew it wasn't his role as Fed chief to say such things, but he did it anyway - maybe Ayn Rand's shade made him do it.

This doesn't stop them from citing von Mises on burning the furniture for fuel, or from this quote:
In the words of Warren Buffett, “It's only when the tide goes out that you can see who's swimming naked.”

Something tells me it's not going to reveal a bunch of supermodels out there in the buff.