Catching On

This story by Rex Nutting of MarketWatch warmed the cockles of my heart, for two reasons. First, because at least one member of the regular business press seems to be catching on to Greenspan:

Greenspan did President Bush two big favors this past week, endorsing the president’s calls for fundamental reforms in Social Security and tax policy. Greenspan said the U.S. economy could “stagnate” if Congress raised taxes or borrowed more money to pay for all the promises Washington has made to the elderly and those soon to be. Like it or not, Greenspan said, government spending must be slashed. Reid, the combative Nevada Democrat, said Greenspan was acting like a partisan “hack.”

The Federal Reserve may consider itself above politics, but its chairman definitely isn’t.

…What really got Reid’s hackles up was Greenspan’s denial of his own role in fostering the fiscal problems he was decrying. Greenspan endorsed the Bush tax cut of 2001 because, without them he said, the surplus could become dangerously large.

How wrong that forecast was! Instead, the projected surplus is now become an endless deficit, and Greenspan’s logic has undergone a similar U-turn. Now, he says, it would be folly to roll back the tax cuts that led to the deficits, because higher taxes would cripple the economy. And yet the U.S. economy enjoyed one of its greatest growth periods ever under those higher tax rates.

The second reason I enjoyed reading this story was because it notes that Reid’s reaction was vigorous, entirely appropriate, and out of character for Democrats in Washington:

Reid’s rude assessment of Greenspan was a bit of a shock, mostly because Washington is used to having Greenspan walk all over Congress, especially the Democrats. A Democratic leader with a spine is something we’ll have to get used to.

By calling Greenspan on his partisan testimony this week, Reid also sent a message to Bush that the Democrats won’t roll over if he nominates a full-time partisan hack as Fed chairman when Greenspan’s term is up next January.

It’s refreshing to see the Democratic leadership in Washington treat Greenspan the way he deserves… and to see that at least some of the press agrees.