Greenspan's cristal balls and data base,

["John Gelles" <johng@xxxxxxxxxx>]

    Chairman Greenspan's speech to the National Association
    for Business Economics, (copied to us by Stephen Dunn
    yesterday,) did reflect thinking by staff at the US central bank.

    It also revealed the Chairman's bias against reaching full
    employment:  he went so far as to say, "monetary policy
    could not permanently influence the level of the
    unemployment rate" -- with no added comment of what
    additional policy might be brought to bear to accomplish
    that goal, or something like it.

    The Chairman took his audience, (now including ourselves,)
    down history's path -- from the age of "steel, fabrics and
    grain" right up to our own "age of the microprocessor,
    fiber optics, and the laser". He took us in quest of price
    -- that most ambiguous measure to reveal or obscure
    what we do in quest of what we need.

    He was not happy with price as a measure of medical
    output or as a measure of output in the information
    industries -- so important to economic power in the
    world now under financial stress wherever we look.

    If price was a problem, the solution was more data.
    Not just price but data that might relate today to
    tomorrow -- in terms of the struggle for high tech
    prowess, eventually as it may contribute to military
    and financial superpower status in coming decades.

    The Chairman opined, "If we had the appropriate
    database, of course, who knows?"   By which he
    meant it might make us rich and reliable as guardians
    of freedom on the planet -- or maybe not. Who
    knows?

    One of us who knows is Henry Liu. Henry knows
    the Chairman was offering "the application of motifs
    without content", not anything to do with Keynes --
    just Greenspan's post modern greenspanism.

    In my view, the Chairman took the measure and
    model of our profession (your profession, if you
    prefer,) and in spite of the fact that "the financial
    system appears to be capable of reaching myriad
    equilibria...[and] the fundamental forces that
    determine which of these equilibria will be selected
    may themselves be inherently unpredictable," he
    agreed to chair the US central bank in quest of
    praiseworthy results no matter the absence of
    cristal balls and meaningful prices, and a data base
    strong enough to make up for it.

    What else could he do? He's too young to retire.
    And the Challenge of Measuring and Modeling a
    Dynamic Economy to achieve a stated purpose
    is not being met by a competitor. So it is his,
    like it or not.

    It seems to me Joseph Stiglitz is more up to the
    challenge, but Susan George said Larry Summers
    did him in. He, the Chairman and Susan might all
    agree "greater payoffs will come from more data than
    from more technique", (which seems to echo our own
    Paul Davidson and the students behind post-autistic
    economics,) but Susan and Joseph would better
    define what is a "greater payoff" -- in terms of food for
    the hungry, and shelter, and freedom from the rule of
    price, profit and debt (monetized or not), at strategic
    levels of decision where vision counts.

        John Gelles