Federal Reserve Chairman Alan Greenspan made his semi-annual pilgrimage to Capitol Hill last week, and it may have been his last. The mandarin of monetary policy is scheduled to retire in January. True to form, the media saw plenty of thunderous implications in the chairman's remarks. As Bob first observed in 2001, there's hardly a question about the economy for which, in the media at least, Alan Greenspan isn't the answer.
Federal Reserve Chairman Alan Greenspan made his semi-annual pilgrimage to Capitol Hill this week. And it may have been his last. The 79-year-old mandarin of monetary policy is scheduled to retire in January. True to form, the media used the occasion to impute to Greenspan's remarks a barrage of thunderous reverberations. "Stocks and Bonds up, Dollars Down After Greenspan," for instance, was the Reuters headline. This raises the question of where the media will turn for omniscience once the Fed Chairman leaves the scene because, as Bob observed way back in January of 2001, "There's hardly a question about the economy for which, in the media at least, Alan Greenspan isn't the answer."
BOB GARFIELD: The lengths people go to, to divine the intentions of Alan Greenspan.
MAN: Let's check the briefcase-- [MUSIC, "MISSION IMPOSSIBLE" THEME] --indicator.
BOB GARFIELD: No matter how impossible that mission, the financial markets and the media that cover them keep on trying. The daily CNBC program "SquawkBox" actually examines the thickness of Greenspan's satchel to conclude whether an interest rate change is in the offing.
WOMAN: It does look kind of chubby.
MAN: I don't think so--
WOMAN: Come on, get another shot of it. Then you'd see it from the side--
MAN: That looks pretty good. Look at the way the line of the leather breaks--
BOB GARFIELD: SquawkBox is by no means alone in the effort to interpret every move, every utterance, every non-utterance of the inscrutable Fed Chairman for signs of his intentions. Greenspan, he of the owlish expression, "an opaque public persona," is stalked by the press as if he were the Princess Diana, the JFK, Jr., the Marilyn Monroe of monetary policy, except--he isn't dead, no matter what you may have concluded by listening to his congressional testimony.
ALAN GREENSPAN: When confronted with a period of structural change, our policy actions must be based in large part on identifying emerging trends from surprises and anomalies in the data--
BILL GRIFFITHS: When he sits down to discuss monetary policy or the course of interest rates, when he's sitting down in Congress there, nobody knows what he's talking about. And that's on purpose.
BOB GARFIELD: Bill Griffiths is host of CNBC's Midday Power Lunch program.
BILL GRIFFITHS: He doesn't say left or right, up or down, north or south. When all is said and done, you still don't know how hot it's going to be tomorrow.
BOB GARFIELD: It doesn't matter though. The great man has spoken. Consider Lisa Singhania. She's an Associated Press reporter in New York who has the unenviable duty, in each day's market wrap-up story, to synthesize from the billion or two billion shares traded what particular news or economic forces moved the market. This exercise is approximately like finding a key phrase to describe the collected works of Aristotle.
LISA SINGHANIA: It's a lot of educated guesswork. And one of the things you realize very quickly is that nobody knows quite what's going on in the market. But on a day where Alan Greenspan is going to do something, when the Federal Reserve is going to meet, I think it's safe to say that you won't have to worry about your lead for the day.
BOB GARFIELD: It's strange to recall that this man was on Gerald Ford's Council of Economic Advisors during the days of 20 percent inflation, and was viewed skeptically by Wall Street 13 and a half years ago as a supposed political animal, subject to presidential manipulation. Now he is virtually synonymous with independence, perspicacity, and something approach papal infallibility. In a story about OPEC oil ministers, the New York Times used the phrase, without feeling any need for further explanation, "Greenspan-like precision." Furthermore, he's a bonafide celebrity. [street noise] What do you think of Alan Greenspan?
WOMAN: I heard that if--whatever he says, the market follows.
BOB GARFIELD: What do you think of Dennis Hastert?
WOMAN: I don't know who that is.
BOB GARFIELD: What do you think of Alan Greenspan?
MAN: I think he's doing a good job.
BOB GARFIELD: How about Vladimir Putin, any thoughts?
MAN: Don't know him.
BOB GARFIELD: What do you think of Alan Greenspan?
WOMAN: I think he's doing a good job.
BOB GARFIELD: With the?
WOMAN: With the market and the situation, yeah.
BOB GARFIELD: And what about Justin Timberlake, how do you feel about him?
WOMAN: Who is this?
BOB GARFIELD: Lead singer for 'N Sync.
WOMAN: Don't know him.
BOB GARFIELD: It's hard to believe that any Federal Reserve Board member could be a household name, but thanks in no small part to the media's obsession with him, Greenspan has transcended his carefully cultivated dullness to become a somewhat aged, balding matinee idol.
LLOYD GROVE: He's at the top of the ziggurat.
BOB GARFIELD: Lloyd Grove writes the reliable Source gossip column for the Washington Post and is himself poised ever-vigilant on the Greenspan watch, because well, duh!
LLOYD GROVE: He's the most powerful man in the world. At least that's what I'm saying.
BOB GARFIELD: And that means tracking his every after-5 pm move. Not that Greenspan swoops through Washington with Henry Kissinger-like flamboyance. He swoops through Washington, on the arm of his wife, NBC's Andrea Mitchell, with studied diffidence. He put the "reserve" in Federal Reserve. He is the center of a worldwide cult of non-personality.
LLOYD GROVE: He's not really an ebullient sort of guy. The most fascinating thing I ever heard about him is that when he takes a bath at 5:30 in the morning and thinks the great thoughts about the economy, he adjust the water temperature by manipulating the taps with his toes.
BOB GARFIELD: Yeah, yeah, yeah, finding just the right balance, neither too cool, nor overheated. The point is the man is of such mythic stature that the Washington Post is trading in his metatarsal bathwater adjustment behaviors. How weird is that? Well, actually, upon further reflection, it's not weird at all because Greenspan is no longer merely the steward of economic expansion, nor even the master of economic expansion. Under the ever-more bearish circumstances, wherein all hope is invested in one historic figure, he has become the messiah of economic expansion, for the investment community, and especially for those who cover it. CNBC's Bill Griffiths.
BILL GRIFFITHS: Now he's God. The media need a symbol. We need a catchphrase. We need, you know, something that will personalize a story that we, when all is said and done, don't fully understand. I mean, who understands economics? If you can give it a face, if you give it a personality, [CHUCKLES] you can better explain what this is all about.
BOB GARFIELD: So load up on Greenspan futures, no matter how bad the corporate news, no matter how rapidly we veer toward recession, no matter how thin the man's briefcase is, you don't have to worry about a bear market for Alan Greenspan, because the media's obsessive fixation on the Chairman of the Federal Reserve is not based on what he actually does, nor even on irrational exuberance. It is based at least as much on naked self-interest. And media self-interest, unlike economic expansion, is immutable and forever. [MUSIC] That's it for this week's show. On the Media was produced by Megan Ryan, Tony Field, Jamie York and Mike Vuolo and edited by Brooke. Dylan Keefe is our technical director and Jennifer Munson our engineer. We had help from Sarah Dalsimer and Josh Nathan Kazis. Our webmaster is Amy Pearl.
BROOKE GLADSTONE: Katya Rogers is our senior producer and John Keefe our executive producer. Bassist/composer Ben Allison wrote our theme. This is On the Media, from WNYC. I'm Brooke Gladstone.