Greenspan provides lessons to Congress in national economics

What others say

Posted: Wednesday, February 18, 2004

In his semi-annual report to Congress (last) Tuesday, Federal Reserve Chairman Alan Greenspan put on a masterful performance, cramming a semester's worth of economic lessons into one sitting.

Despite their best efforts, Democrats could not spin Greenspan's words into criticism of the administration policies, nor into an argument to raise taxes, as they would like to do in order to finance even greater spending.

Greenspan deflated one partisan windbag when he explained job growth something liberal politicians cannot seem to comprehend.

After wringing his hands at length about manufacturing job losses, the Pennsylvania congressman tried to get Greenspan to say the White House job growth forecast was "fantasy."

Greenspan explained, with commendable patience, that much of the job loss was the natural result of productivity growth.

Increased productivity, of course, is what lifts the standard of living for every American.

Manufacturing jobs have been disappearing for decades, but manufacturing's share of the economy has been steady. All that means is that fewer people can produce the same amount of goods, because of better tools and management.

The congressman went on to wonder aloud what Congress should do about states in the Rust Belt that are losing jobs to other states and other nations. Greenspan was unable to advise him how to command the tide not to rise.

Some, relatively small, number of low-wage jobs have been lost to companies overseas. Liberals prefer to kill jobs in America by high taxes, sending part of the revenue overseas as foreign aid. It is reasonable to ask, why not let them get jobs instead?

Soon after Greenspan fully answered the job growth question, another liberal Democrat asked the exact same question, either from appalling ignorance or because of being deafened by partisanship.

Greenspan repeated that job forecasting is a difficult task because it is based on the rate of productivity growth, which he said is notoriously difficult to predict. He would not characterize the White House forecasts as fantasy and said they probably were reasonable if productivity growth slows.

Greenspan later told another Democrat that he did not see how domestic job growth could fail to rise, given the current trends.

"You cannot readily stop progress," Greenspan said. A few politicians apparently are determined to try.

Florida Times-Union, Jacksonville - Feb. 13

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