The nearest to an admission that the USA cannot be the "engine of growth" for the world economy on this occasion.
A stock market fall on the news was I understand expected. "Buy on the rumour, sell on the fact". But this emphasises that Greenspan is no longer believed to be a magician.
And what of the argument that the market would have rather seen sort of a shift to neutral, maybe signaling the end of the rate cuts, but see the Fed saying that they are still on alert, that the economic weakness isn't over yet?
These developments are generally a vindication for marxist theory, which sees the total exchange value in an economy as broadly finite, and the drive ever to increase profits coming up against the limits on the purchasing power of the population.
Even though these limits have probably been rather more flexible for the USA because of its privileged position in the world economy, the glass ceiling to growth seems definitely to have been hit.
If all the major capitalist economies are stagnant together it may take quite a long time to determine which areas of capital have to be destroyed to allow the cycle of accumulation to begin again. Maybe the small producers of the developing world will bear the burden again. But it is possible that the period of stagnation could go on a long time.
Indeed when production does pick up again, it may do so with the system operating on an even higher global level of unemployment/underemployment.
Yes this will leave working people at a disadvantage in the struggle for wages, but it is a time when, politically, together with all democrats they should go on the offensive for the social control of the economy, which clearly cannot be left exclusively to the arbitrary decisions of private ownership.
Chris Burford