Fantastic tribute to Alan Greenspan by Milton Friedman in today's WSJ entitled, "He has Set a Standard." It's always so interesting to see 12-cylinder brains just go at it and see what scraps you can catch as they fall off the table. Messrs Friedman and Greenspan though friends have apparently long disagreed about strict rules versus administrator discretion in central banking policy. Mr. Friendman's tribute conceeds, halfway. He points out in full detail Greenspan's success versus the first 70 ineffectual years of the Federal Reserve. He conceeds that Greenspan did an excellent job keeping the money supply consistent and noninflationary while at the same time holding out that not every adminstrator will have Mr. Greenspan's talents. (Incidentally, he points out what many of us know --that it was Ronald Reagan who set the "hands off the Fed" example, first with Paul Volker and then with Alan Greenspan, that all Presidents (thankfully) now follow).
Incidentally, to my "Massachuestts" friends who haven't figured out that the economy is booming and has been for a long time -- Mr. Greenspan used his last day in office to raise the Fed Funds rate (a 1/4 point) for the FOURTEENTH time in a row. That's done because the head economist of the land is fearful of inflation, a sign that the economy is growing too fast (again, fourteen times in a row).
Also, for those who consider the Federal Reserve to be a "black box," two great reads are Bob Woodward's Maestro, as well as Secrets of the Temple.
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