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PAGE 8A -
Opinion
Greenspan no help
to Bush-bashers
WASHINGTON —Alan
Greenspan, entering his stretch
run as the nation's central
banker, was at the top of his
form last Thursday. He led the
Federal Open Market
Committee (FOMC), without
dissent, to limited money
tightening he had prepared
financial markets to expect. It
even started a mild bond rally.
Yet, formerly sycophantic fin¬
anciers were not pleased by
the Federal Reserve chair¬
man's tour de force.
Henry Kaufman, the 76
year-old archetypal Fed
watcher, set the tone by
declaring: "I believe the Fed is
behind the curve." In a chorus
of complaint, bond traders and
currency speculators assailed
Greenspan for moving much
too slowly. They grumbled
that last Thursday's 25-basis
point increase in the federal
funds rate to 1.25 percent was
too little, too late —- especially
too little. To stave off inflation,
said these critics, the Fed
should be raising interest rates
in much larger increments.
Since the numbers show
inflation under control, why
the agitation for super-tighten¬
ing? One reason is that it's
hard to make real money in the
markets when the central bank
is toying with incremental
changes. The big payoffs
result from large swings, up or
down. But there is a darker
reason for finding fault with
Greenspan: His plan does not
help Sen. John Kerry defeat
President Bush.
New York's great financial
houses are filled with ,
Democrats who are deter¬
mined to drive George W.
Bush out of the presidency.
Old hands who keep an eye on
Wall Street have never seen
such partisan fervor. The real
trouble with Greenspan is that
he poses no threat to Bush and
no help for Kerry.
Shrugging off the central
banker's aura of mystery,
Greenspan lately has operated
with a transparency that per¬
mits markets to adjust to Fed
plans. The 25-basis point
increase for June was
telegraphed well in advance.
Another 25-basis point .
advance is scheduled for
August, likely ending pre¬
election tightening. That will
not be enough to validate
claims by Gene Sperling,
President Bill Clinton's nation¬
al economic adviser and now
Kerry’s economic strategist,
that federal budget deficits
inevitably produce ruinous
interest rate increases.
Never before has
Greenspan led so unified a
Federal Reserve. It was
expected that his incremental
approach would lose at least
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COUNTY NEWS — Wednaaday, July 7,2004
Robert <*
Novak
COLUMNIST
one FOMC voting member:
William Poole, president of
the St. Louis Federal Reserve
Bank and a conservative anti¬
inflation hawk. A product of
the University of Chicago,
Poole once was an adjunct
scholar at the libertarian Cato
Institute and a member of the
Shadow Open Market
Committee second-guess¬
ing Fed policy. But Poole
joined Greenspan last week in
a 12 to 0 vote.
Greenspan’s dominance
can be traced in part to the
way he shaped the current
Federal Reserve. He has
loaded it mainly not with
experts in monetary policy but
with generalists — such as
Vice Chairman Roger
Ferguson, a former New York
attorney. Timothy Geithner, a
former International Monetary
Fund and Treasury official
who became president of the
New York Fed last November,
lacks the influence of his pred
ecessors in that post.
Ben Bemanke, the one Fed
governor put on the board at
the Bush White House's initia
five, is an esteemed theorist on
monetary policy who wants to
set inflationary targets for the
central bank. Since he is solid
ly on board with Greenspan,
Bemanke does not see the
imminent danger of inflation
perceived by Dr. Kaufman and
other sharks of Wall Street.
Kaufman, who at his influ¬
ential peak two decades ago
was known as "Dr. Gloom,"
was quoted last week as say¬
ing Greenspan's gradualism
may be good for the economy
"but not for constraining infla
tion." That is the old-time Wall
Street religion — the economy
be damned in a world made
for bond traders.
What the Fed says, howev- j
er, is there is no need today for
Kaufman’s choice between
stagnation and inflation. Fed
sources see the inflationary
growth rate at only 1.7 per¬
cent. Given that such forecasts
experience a 1 percentage
point margin of error, plus or
minus, inflation could be as
low as 0.7 percent. Nobody
sees a bubble economy racing
out of control. Greenspan
surely is not returning to his
"irrational exuberance"
description of the stock mar¬
ket. That’s bad news for finan¬
cial speculators and Bush
bashers.
Robert Novak is a nation
ally syndicated columnist and
a television commentator.
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"No matter which one of those guys wins,
I've got a feeling we're going to be the ones that lose. M
House race shows debate
Mike Serkedakis, visiting
my home to solicit my help,
leaned forward as he revealed
confidential information about
Ed Setzler, a Ranger-trained
Army vet who lives across the
street,
"Ed’s a Democrat," Mike
said. I looked startled. "Yes,"
Mike said again, "Ed is a
Democrat."
Later, I peeked through the
blinds. Ed was working in his
yard. It was hard to tell at this
distance whether "Captain
Ed," who served in Kosovo
an d the Persian Gulf, really
was a Democrat. From the
tone of Mike’s voice, one
would have thought such a
condition was accompanied
by a swarm of locusts or a
visit from the HazMat
squadron.
Ed and Mike are among
f 1V e candidates running for an
0 pen state House seat (District
35) in North Metro Atlanta.
All five vow they are
Republicans. Mike had come
to my door to seek my vote
and warn me.
Is it possible that one of
these candidates is a stealth
Democrat?
The next day, the mail
arrived with a huge color post¬
card from my old pal, Shawn
Davis, a GOP candidate for
the state Senate and a one¬
time publicist for the Georgia
Force arena football team.
I had hoped the card was
an invitation to buy bargain
price Force tickets. Wrong.
The card included a suitable
for-framing portrait of
Democratic presidential candi¬
date John Kerry with former
candidate John Edwards. The
mail piece also contained
Bill
Shipp
COLUMNIST i
color photos of former Gov.
Roy Barnes, ex-Sen. Max
Cleland and a couple of other
guys, each with a big, red D
(for Democrat) beside his
name.
The card explained that
Shawn’s Republican oppo¬
nent, Lance Cooper, gave
campaign money to these
Democrats and, therefore,
"cannot be trusted to represent
your conservative values."
(The mailer barely had
room to note that Shawn used
to work for the Public Service
Commission or that his dad,
Guy Davis, a GOP nominee
for governor, challenged
Democrat Gov. Joe Frank
Harris for a second term in
1986.)
For weeks now, politics
have grown steadily meaner.
On the national scene.
Democrats and Republicans
have compared each other’s
presidential candidates to
Hitler. In this day of unrelent¬
ing partisan diatribes on TV,
radio and even the movie
screen, perhaps one should not
be surprised that donkeys and
elephants have discarded the
envelope of propriety, taste
and civility in discrediting
each other.
In Georgia, with the pri¬
mary just days away.
Republican candidates are
bashing each other with feroc¬
ity reminiscent of Democrats
in their halcyon days of one
party primaries. Ronald
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Reagan’s 11th Commandment
(avoid harsh words regarding
a fellow Republican) has van¬
ished in the hurricane of
invective.
Statewide, U.S. senatorial
contenders Herman Cain and
Mac Collins take turns excori¬
ating front-runner Johnny
Isakson as a big-spending
"moderate" who is soft on the
abortion issue. Labeling a
rival a moderate is pretty weak
tea compared to what’s being
said in several state legislative
races. After all, "moderation"
is part of the state motto.
As we mentioned, the
GOP’s legislative campaigns
are getting so testy that some
candidates lash each other as
Democrats or Democratic
sympathizers. In parts of
Georgia, one could be called
out for such talk.
Why have Republicans
suddenly turned up the vol¬
ume on their primaries?
Probably because many local
and legislative elections will
be settled in the July 20 ballot¬
ing. Democrats have aban¬
doned the field in those con¬
tests.
In addition, a subliminal
message, relating to race and
the Democrats’ increasing
identification with minority
concerns, is conveyed in some
attempts to define a GOP con¬
tender as a disguised
Democrat.
In Atlanta’s mostly north¬
ern suburbs, however, race is
barely on the scope. When
Serkedakis warns that Setzler
is a Democrat, this is what he
really means:
"Setzler is in league with
the homeowners' associations.
He opposes the tourist gate-
way proposed for North 1-75.
He is against building more
and more apartments and sub¬
divisions and establishing
more shopping areas in North
Metro. He’s overly concerned
with environmental issues,
quality-of-life matters and so
called threats to the infrastruc¬
ture. After all. he is a profes¬
sional environmental consult¬
ant. What would you expect?"
On every Republican lit
mus-test item right to life,
gay marriage, the war in Iraq,
etc. — Setzler is so far to the
right that he may be closer to
a Whig than a Republican. But
a Democrat he is not. A slow
growth or "smart growth"
guy? That’s him.
Keep an eye on the House
District 35 primary contest.
Pushing aside the bushwah
about party affiliation, this
race is a distillation of a
regionwide debate on growth
vs. slow growth. The outcome
will give us a hint about the
direction of the increasingly
dominant Georgia Republican
Party. Will it be the party of
planned progress and preser¬
vation or unbridled exploita¬
tion?
As for Shawn Davis' attack
on fellow Republican Lance
Cooper, nearly everybody
understands that Cooper is not
really an ally of Democrats no
matter how much cash he has
contributed to Edwards,
Barnes, et al. He is a trial
lawyer, a protective species
whose tendencies often tran¬
scend party affiliation.
Bill Shipp's column
appears every Sunday and
Wednesday. His e-mail
address is bshipp@bell
south.net.