Administration officials insist he's still the likeliest choice, though the deal is never over until the thin man in the Oval Office sings. The thin man likes Mr. Greenspan more than is widely known. But the mere hint that he might be replaced shows how little Washington has learned from 20 years of economic turmoil. Chairman Greenspan is actually President Bush's biggest economic asset. Yet having pushed Mr. Greenspan out to sea to steer the U.S. economy with only a single oar -- monetary policy -- the kibitzers in Congress and the White House are now telling him how to row. And if his form isn't perfect, they jeer and then threaten to get a new oarsman. In other words, the same crowd that raised taxes three months into a recession is now lecturing the one Washington official who inspires confidence in financial markets. If Mr. Bush wants to kill what everyone hopes is an incipient recovery, he could certainly do it by dumping Mr. Greenspan. In a town where integrity breeds enemies, Mr. Greenspan has shown too much character. He and his Fed allies haven't laid down and played the usual game of "roll-the-Fed." Last year's budget deal was supposed to open the money spigots, or so the White House promised. But unlike the Bush Treasury, the Greenspan Fed remembers the 1970s, when roll-the-Fed produced inflationary booms followed by ever-nastier busts. Enough of its members know that the Fed's main task is to keep prices stable; stimulating economic growth is the job of fiscal policy. Mr. Bush's economic advisers either don't understand this, or won't admit it lest they accept blame for their own fiscal abdication. It's so much easier to bash the Fed. Treasury Secretary Nicholas Brady spent most of April lobbying for easier money, even if a little more inflation had to go along with it. The Japanese and Germans first turned him down, so he leaned on the Fed. He even made phone calls to two Fed governors to urge them to ease, as columnists Evans and Novak report. The governors agreed, but for their own economic reasons. Governor Wayne Angell dissented -- less for policy reasons than to warn administration inflationists. Congress is a co-conspirator because it too is in fiscal gridlock. Larry Lindsey, a White House aide and new nominee to the Fed board, went for his Senate hearing last week and allowed that the Fed could have eased more last year. The inflation monster was still not appeased; every Banking Committee senator but Florida Republican Connie Mack griped or ranted for easier money. Mr. Greenspan is well liked on the Hill, but Congress still wouldn't mind an easy-money replacement. Even the corporate elite are scapegoat hunting. The Business Council, composed of men who never object to higher taxes on working stiffs, is whining about Mr. Greenspan. "The Fed should ease more and bring interest rates down," says James Robinson, the American Express chairman. Amex shareholders can only hope Mr. Robinson knows more about finance than he does about monetary policy. Mr. Greenspan's main defenders are the financial markets, and ultimately the American middle class. Lawrence Kudlow, the Bear Stearns economist, calls Fed performance under Mr. Greenspan "uniformly constructive." Inflation has fallen from the oil-price spikes in October to an annualized rate of less than 3%. The Fed's real struggle has been to get long-term interest rates, the main engine of a recovery, to fall too. That takes art as well as science. The Fed can tinker with short-term rates, but long-term rates carry an inflation premium and so don't always fall in lock-step. They may even rise if investors think the Fed is being rolled by the White House. The fact that long-term rates rose after the last Fed easing, on April 30, is one reason the Fed is believed not to have eased again this week. It's this political factor that argues most for Mr. Greenspan's reappointment. Any replacement will be seen as a victory for the cause of roll-the-Fed. One possible alternative, New York Federal Reserve Bank President Gerald Corrigan, is widely seen as Mr. Brady's ally; if he's nominated, invest in deutschmarks. A second possibility, current Fed governor and former Treasury aide David Mullins, has shown signs of independence but not yet enough for the big job. Former Fed vice chairman Manuel Johnson is popular in the White House, but he is also seen as highly political. In short, any replacement would spend months or years winning credibility in financial markets that Mr. Greenspan has already earned. The markets' political sensitivity is a signal that the American middle class does not want its wealth robbed again by a new inflation. If the recession persists longer than the White House expects, the solution lies in a new fiscal policy, such as a renewed campaign to cut capital-gains taxes. (Mr. Greenspan recommends a zero capital-gains rate.) It won't help Mr. Bush to fire the one economic-policy official who's learned something from the past 20 years.
Blame-shifters are making Alan Greenspan and his Federal Reserve scapegoats in the current recession. The Fed is not only responsible for creating a bubble that has caused our economy to lose over half of its jobs since December 2007, but it also created an environment where people were willing to take on Other potential candidates do not appear ready for the job and Greenspan has become Bush's biggest economic asset. Bushes economic advisers and Congress who raised taxes three months into a recession are now expecting the Fed's to ease money supply and lower short-term interest rates. If the recession persists too long, the solution may lie in a cut to capital-gains taxes, strongly recommended by Greenspan. His main defenders are the financial markets and the American middle class.