Greenspan sees 'marked turnaround' in economy

[oracle]

Greenspan sees 'marked turnaround' in economy (http://www.suntimes.com/output/business/green03.html)

June 3, 2003

ASSOCIATED PRESS

BERLIN-- Federal Reserve chief Alan Greenspan said Tuesday he sees indications of a "fairly marked turnaround" in the U.S. economy.

Data for May suggest the economy has "stabilized," he told a conference of top central bankers in Berlin.

"The acceleration has not yet begun," he said, before noting that recovering stock markets and other indications "are suggestive of a fairly marked turnaround."

Recent productivity gains and the impact of tax cuts taking effect July 1 will likely boost consumer spending and feed into the job market, Greenspan said, though he also injected some caution into his remarks.

"We are stabilizing and there is some indication of return, but it's not at this stage by any means clear," said Greenspan, addressing the conference via audio link.

Greenspan renewed previous assessments that deflation is a remote threat.

...


Click here to read more (http://www.suntimes.com/output/business/green03.html)

[tacitus]

The left will be screaming now.

[The_Elucidator]

Oops there goes another DNC issue, Oops there goes another DNC issue, sing it with me now.. Oops ...

[tacitus]

"...And another one bites the dust."

[Estragon]

Greenspan should have been worried about deflation a year ago. He only noticed the threat once it had passed. The guy is overrated, riding on the coattails of the job he did a decade ago.

While he did a great job throughout the '90s, after the Fed pumped an extra $800 billion into the economy in late 1999 to avert any possible Y2K run on the banking system, feeding the stock market mania, he blew it.

The extra cash was a wise precaution with all the media hype at the time. But starting in 2000, he reacted the wrong way by raising interest rates repeatedly. The problem wasn't inflation or interest rates; it was a monetary imbalance that should have been dealt with over time by reducing future infusions slightly until the system was again on target.

Raising interest rates tightened money at the very moment the markets were entering a major correction. This "solved" one problem by exacerbating a more immediate one. It was like treating an obese patient by starving him to death.

Reappointing Greenspan, a valiant warrior well past his prime, ranks as one of G.W. Bush's biggest mistakes.

[DesertFox]

Agreed. Boy's mind isn't what it was.

[CaliGirl]

Isn't Alan about 77 years old? Doesn't GWB want to reappoint him? Seems like I read or heard something to the fact about reappointing him a month or so ago. I think he is too old to be reappointed.