OK, Ben, but Greenspan said . . .

Steve Tripoli May 17, 2007
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OK, Ben, but Greenspan said . . .

Steve Tripoli May 17, 2007
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KAI RYSSDAL: We were reminded again today that the current chairman of the Federal Reserve sees things differently than his still-in-the-news predecessor. Ben Bernanke told the world this morning the housing slowdown probably does have further to run, but he doesn’t think it’ll derail the whole economy.

Whats-his-name Greenspan made a speech of his own today in Atlanta. He’s been saying there’s a 1-in-3 chance of a recession this year. We asked Marketplace’s Steve Tripoli to find out whether the incumbent might be getting a little irked with all the ink the other guy’s getting.


STEVE TRIPOLI: Bernanke must feel like the guy who batted after Babe Ruth. You remember him, don’t you?

OK, it’s not that bad. But Standard & Poor’s chief economist David Wyss says Greenspan’s musings aren’t that good, either. Wyss has worked at the Fed.

DAVID WYSS: I think it has to annoy Bernanke. I think it certainly takes a lot of focus off of Bernanke and it rather fuzzes the message.

Other economists agree that it’s bad to create uncertainty about the Fed’s message.

But Commerce Bank Chief Economist Joel Naroff says that’s not happening, because there’s no doubt who’s running the Fed.

JOEL NAROFF: Mr. Bernanke. Everybody knows that. And regardless of what Mr. Greenspan says, Mr. Bernanke is the Fed chairman and he’s the one to either show that he knows what he’s doing or doesn’t know what he’s doing.

But Standard & Poor’s Davis Wyss worries that Greenspan may be creating uncertainty anyway.

WYSS: Remember, a lot of people also understand that even though Bernanke is now in charge, he’s in charge only with the assistance of a majority vote of the people at the Federal Open Market Committee. And I think people treat comments from Greenspan much as they would similar comments from another member of the Federal Reserve Board.

He says the result can be misleading.

WYSS: It comes across that maybe there’s disagreement within the Fed, since Greenspan has been just so recently there.

An ocean away yesterday someone asked the Bank of England’s head whether central bankers like Greenspan should comment on policy matters once they leave. He replied that he’s grateful his predecessor has stayed out of the public eye.

I’m Steve Tripoli for Marketplace.

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