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Commentary
The President, the Senate and everyone with a greenback in his wallet has concluded that Alan Greenspan is as cute as a little red wagon and deserves a fourth four-year term as head of the Federal Reserve Board. The apotheosis of this central banker, in the record- setting 107th month of the uninterrupted economic expansion, accords with the public's hunch during this presidential season: Politics today is only marginally related to social betterment.
Recently the Fed has several times raised interest rates. Should it have? Irwin Stelzer, a consultant and fellow of the Hudson Institute, cheerfully says: "If we could know such things, the Soviet Union would still be with us, because economies could be `managed.' "
Chastened government no longer believes it can fine-tune the economy with "countercyclical" taxing and spending. Interest rates are government's only tools for managing. Stelzer says that when government decides to raise rates - always on the basis of imperfect information, and today in a swiftly changing economic context - it is deciding to err.
The question is, to err in which direction? To raise rates too much too soon? Or too little too late?...