Greenspan Is Scheduled to Be Confirmed for 3rd Term at Fed
Alan Greenspan will be confirmed by the Senate today to a third term as chairman of the Federal Reserve Board, the world’s most powerful central bank.
The Senate vote will end a four-month delay on President Clinton’s nomination of the conservative 70-year-old Republican, a proven inflation hawk with a legion of friends and foes.
Confirmation will mean that regardless of who wins the White House this fall--Democrat Clinton or Republican Bob Dole--Greenspan will have four more years to prevent the economy from overheating by manipulating interest rates to hold growth to about 2.5% annually.
“He’s done a great job,” said Bernard Klawans of the Valley Forge Fund in Valley Forge, Pa. “Look at the bottom line: the economy. There’s no inflation to speak of, and you can pretty much get a job if you want one. All’s under control.”
Besides Greenspan, the Senate is set to confirm White House budget director Alice Rivlin as Fed vice chairman and St. Louis economist Laurence Meyer for a seat on the Fed’s Board of Governors.
Sen. Tom Harkin, an Iowa Democrat, had blocked the nominations since February. He lifted his “hold” last week after being granted time on the Senate floor to debate Greenspan’s economic policy. He and other critics complain Greenspan has been too quick to raise interest rates to fight inflation. That slowed the economy and job creation unnecessarily, they said.
“The Greenspan Fed has stifled economic growth and the incomes of average Americans,” Harkin declared, standing alone in a nearly empty Senate chamber last Thursday.
Greenspan’s supporters, though, say he’s deftly maintained a healthy economy that has combined solid job creation with low inflation and robust corporate profits.
Ed Midanek, a money manager at Solon Asset Management in Walnut Creek, Calif., said, “Maybe, at times, he’s been a little overly concerned about inflation. But overall, he has done a great job. He deserves another term.”
Dole, as Senate Republican leader, had refused since February to yield to Harkin’s demands for a debate on Greenspan. However, shortly after Trent Lott of Mississippi succeeded Dole as Senate majority leader last week, he agreed to permit debate last Thursday, Friday and tomorrow.
That ended an impasse that rattled nerves on Wall Street and frayed tempers in the White House and on Capitol Hill.