The World Around You

Paul Krugman has a few choice words for Alan Greenspan in this morning’s NY Times,

n his July testimony to Congress on monetary policy, Alan Greenspan was cautious but _ adjusting for his usual funereal demeanor _ quite upbeat. “Although the uncertainties of earlier this year are as yet not fully resolved,” he declared, “the U.S. economy appears to have withstood a set of blows. Not surprisingly the depressing effects of recent events linger. Nevertheless, the fundamentals are in place for a return to sustained healthy growth.”

O.K., I cheated: those quotations come from his testimony in July 2002, not July 2003. Needless to say, “healthy growth” failed to materialize. Undaunted, he said pretty much the same thing last week _ and the result was to reinforce a huge sell-off in the bond market, which may undermine the very recovery he predicted.

I used to be a great admirer of Mr. Greenspan. But something has gone very wrong with the maestro.

It’s about time that people start holding people responsible for theactions they take and the words they speak. How many times is Mr. Greenspan going to get away with stating that we’re on the “verge”? When does it become the boy who cried wolf?