Barron’s resident curmudgeon asks the question: Is the Fed Chief too tight with the President? Based upon research done by Wharton Finance Professor Kenneth Thomas, it is:
“Kenneth Thomas, a lecturer in finance at Wharton, the U. of Penn’s famed business school. Mr. Thomas has discovered that Alan Greenspan has become, in his view, too tight with President Bush.
For this startling disclosure, we’re indebted to Charleston’s Post and Courier, which scooped the world (or certainly the provincial slice that goes under the name of the Greater New York Area), with the story. Mr. Thomas, manifestly a brave soul, has pored over Fed data that he extracted by grace of the Freedom of Information act and come to the conclusion that Mr. Greenspan has lent himself to undue influence by the White House.
According to his research, the number of confabs between Greenspan and Bush or Bush subalterns took a quantum leap upward in the three years from 2001 through 2003, which, of course, were the first three years Mr. Bush was in office. That was, by Mr. Thomas’ careful reckoning, 67% more times than Mr. Greenspan chose to visit the White House in the 1996-’98 stretch, when Bill Clinton was the prime tenant. Of course, it should be pointed out, Mr. Clinton was frequently otherwise engaged in the Oval Office during that period, so Mr. Greenspan might not have gotten very many invites.
Evidently a suspicious type, Mr. Thomas notes that Mr. Greenspan traipsed up to the White House 55 times in 2002 and 68 times in 2003, compared to 12 a year between 1996 and 2000. He expresses curiosity about a possible connection between the step-up in such powwows and what he dubs as Mr. G.’s “flip-flop in favor of the Bush tax cuts.”
Thickening the plot, sniffs this academic gumshoe, is that Dick Cheney, Condi Rice and Andy Card were included in a number of such Greenspan-White House sessions. The knock against them, he says, is that none is an economist, a grave charge which, at least at this writing, has gone unanswered.
Mr. Thomas may lack the provenance of a Bob Woodward or Seymour Hersh, but he has picked up some of the standard clever dodges used by his journalistic counterparts to achieve wiggle room. Thus, he insists, even if the meetings were convened for nothing more than a game of whist, they give the wrong impression and appearances count.
Awed by Mr. Thomas’s diligence and industry, we nonetheless believe Mr. Greenspan in his visits to the White House likely was engaged in some absolutely harmless activity like lobbying to keep his job. And, we’re happy to note, that mission certainly has been accomplished.”
Add ‘Political Mischief‘ and ‘over-reaching’ to the rest of your reasons (serial bubble blower, shill, etc.): When future economic historians eventually write about this Fed Chief, Greenspan is likely to be judged quite harshly.
UPDATE: May 23, 2004, 11:00am
Kenneth H. Thomas was kind enough to allow us to reporduce his findings, including the graphic (which is the -pun-intended- money shot) here.
Up and Down Wall Street: Voodoo Journalism
Barron’s, Monday, May 24, 2004
Signs suggest improper influence of Bush on Fed, expert says
Charleston Post and Courier, 9:13 a.m. Monday, May 3, 2004