Nathan:
>Not as much as any of us would like, but to give all credit to Greenspan
and
>the bond market just seems a complete ideological surrender on left
>traditions supporting wage growth as a key component of improving economic
>growth.
-Haven't you heard the famous story from '93... where Clinton refers, in effect, -to New York Times columnist Thomas Friedman's celebrated "golden -straightjacket"? The following quote is from a Slate article on Bob -Woodward's new book on Greenspan: -There is no "Cult of Greenspan" -on the left, just a recognition of who really runs economic policy: the Fed -and investors (the market) - or the "electronic herd" as Friedman likes to -call them.
Since the Bob Woodward quote from THE AGENDA and now from his new book are apparently the holy font of the Greenspan worship, of course I have heard them. And yes people can worship an evil god through hatred and attribution of all power to the evil god.
Of course Greenspan and monetary policy play a role in economic prosperity, but I do not believe that Greenspan is some how more uniquely smart nor solicitious of Clinton than Volcker was of Reagan in the 1980s, yet lower-income folks were royally screwed in the 1980s and have seen some real gains in the 1990s. So what explains the difference in how the respective booms affected economic inequality and the wage gains of lower-income folks?
In the 1980s, the boom was sustained by military Keynesianism pumping the excess federal deficit dollars into white suburbs in the form of defense contracts and tax cuts.
In the 1990s, taxes on the wealthy were increased and programs like the EITC, infrastructure spending and other transfers were increased in more lower-income areas. Labor policies supported affirmative action, unions and high-wage federal contracting rules. Not to the extent we would like, but it hardly seems unreasonable to say that Greenspan was not visibly dedicated to policies of cutting economic inequality compared to Volcker, so the other changed variable - the shift from GOP Presidency to Clinton - might be a more reasonable variable to explain the difference.
So I return to the point that the cult of Greenspan is very real and very irrational on the Left as well as the Right, since it fails to explain why Greenspan did what Volcker could not.
And the explanation of the cult of Greenspan is, on the other hand, easy to explain, since it exists on the Right as well as on the far Left for the same reasons - hatred of Clinton and the Dems and the attempt to deny all responsibility for the present economic situation to the budgetary policies enacted in '93-94.
-- Nathan Newman