In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Nov. 18, 2005 / 16 Mar-Cheshvan 5766

The Greenspan Effect

By Mort Zuckerman

Mort Zuckerman
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http://www.JewishWorldReview.com | A decade ago, I wrote a number of editorials criticizing the Federal Reserve for putting the brakes on the economy too soon and hard. Shortly afterward, I ran into the Fed chairman, Alan Greenspan, who asked, "What do you know about monetary policy that I don't?" It was a riposte I am happy to recall, coming from someone who earned the respect of the world by seeing so many submerged icebergs long before we hit them.

In the latter half of the 1990s, Greenspan differed from much of the conventional economic wisdom. The economy and employment were growing so fast it looked as if inflationary overheating were imminent. Greenspan believed, instead, that information technologies were improving productivity more rapidly than official statistics showed. To our great benefit, he let the productivity—for that is what it was—continue, and we didn't suffer the inflation that had been so widely predicted.

During Greenspan's long stewardship at the Fed, we avoided countless icebergs—the stock market crash of 1987, financial crises from Mexico to Asia, two recessions, corporate scandals. But measured inflation rates have fallen, the business cycle has been smoothed out, the jobless rate is down, so is the cost of borrowing, and the dollar has stayed at the top of the world's currencies, with only two mild recessions and an average inflation rate showing dramatic improvement.

Numbers don't tell the entire story, however. Greenspan emerged as a kind of Rock of Gibraltar, inspiring confidence in financial markets here and abroad. His success lay in a unique ability to understand the psychology and mechanics of markets and business, to sift what mattered from a mountain of data, and to avoid being locked in by experts or inflation targets.

No chairman of the Fed has so excelled in the necessary art of ambiguity. "If I made myself clear," he said once, "I have misspoken." His wife says he had to propose three times before she understood him.

Of course, no one could do so well without incurring some criticism. Some attacked Greenspan for the stock market bubble of the 1990s and the current housing boom. Greenspan has been unfazed, however, believing that the Fed should not be piercing bubbles but rather maintaining an economy flexible enough to survive the turbulence if bubbles burst. I think a more valid criticism might be lack of resistance to the Bush tax cuts, which contributed to the monstrous deficits we're now enduring.

Nonetheless, Greenspan leaves a clean desk and a freer, less regulated economy more able to correct itself than when he took over. The question as we change pilots is whether the new Fed chairman, Ben Bernanke, can see the icebergs the way Greenspan could. Bernanke is an outstanding economist, but he lacks Greenspan's experience with financial markets. How will he read the mixed signals, with inflation accelerating for the first time in years, yet core inflation still at around only 1.3 percent—well within the 1 to 2 percent comfort zone?

Proceed with caution. If Bernanke feels he has to establish his anti-inflation chops, he will have little room. Greenspan has already caused the Fed to raise the federal funds rate from 1 percent to 4 percent. Bernanke has always been willing to take a fresh look at data and use it to address many complex issues, such as how U.S. interest rates have managed to stay low despite the twin budget and trade deficits. Putting aside Greenspan's riposte to me, I'd say this is a time for Bernanke to calibrate interest rates carefully and postpone further tightening (always subject to new data). Many believe the current inflation concerns will turn out to be a false alarm, given levels of productivity and the pressure of global competition on prices. One clear risk is the current-account deficit. It now requires the United States to attract $3 billion every single business day. Here might well be the seeds of a dollar crisis forcing higher interest rates—the last thing America's economy, housing market, and overindebted consumers need.

We enjoy a special home-court advantage in having our currency as the world's financial standard. It enables us to borrow in the same currency we print. Foreign producers send their merchandise here; we send dollars there; they, or their central bankers, invest in dollars, chiefly U.S. securities—as if the money never left home. But how many will willingly hold the dollars they have and accept current low interest rates without trust in the chairman's judgment?

Since we will have to fund our deficits by drawing freely on surplus savings elsewhere in the world, we must find a way to do this without a sharp drop in the dollar or a related backup in interest rates, at a time when the budget deficit appears out of control.

Of all President Bush's recent nominees, Bernanke is arguably the most important, since his leadership will powerfully affect the future of the American economy—and that of the world.

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JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here.


© 2005, Mortimer Zuckerman