What Syrup Means

Federal Reserve Chairman Alan Greenspan’s recent White House breakfast with President Bill Clinton is being minutely scrutinized by analysts for hints about a possible change in interest rates and broader issues of fiscal policy.

For example, Greenspan’s seemingly offhand opening, “How about this weather we’ve having?” has been interpreted by some as a metaphorical expression of concern about the overall economic climate. Is the current bull market due for a downturn? “I don’t know about that,” says one Greenspan-watcher, “but I find significance in his remark about the orange juice. He said, ‘artificial is never as good as natural’--a thinly veiled promise that the Fed is going to avoid tampering with the mechanisms of a free market.”

Meanwhile, the president’s request that Greenspan pass the pepper has caused outright panic in some quarters. “Greenspan flat out told the president that the shaker was empty,” notes a ranking economist. “Was that his way of saying Treasury reserves are at an all-time low, that the federal deficit is back, that there’s no money for funding Social Security? To me, it’s cause for deep concern.”

But not as deep as the already controversial “pancake dialogue.” To Greenspan’s evident ire, Clinton pointedly remarked during the breakfast that “the more syrup you slop on ‘em, the better these pancakes taste”--triggering speculation that behind his folksy aphorism is strong presidential pressure on the Federal Reserve to “prime the pump” economically by printing more currency. Greenspan’s sharp reply--”Yes, but isn’t it awfully fattening?”--is being taken by experts as a digging in of his heels on the issue, betokening a serious policy breach with the administration.

Fuel was promptly added to the fire when the president betrayed a conspicuously naive belief in laissez-faire economics by stating, “I just keep on eatin’ the scrambled eggs till I’m plumb full up”-- and when Greenspan attempted to interject a comment, cut him off with “Hang Hillary’s ol’ diet.” “An enemy of regulation,” warns a high Treasury official, “could undercut our entire monetary system.”

Can the United States afford such maverick economic theories in its president? Greenspan evidently thinks not. As the president began choking on his third slice of whole-wheat toast in rapid succession, the chairman was overheard mumbling to an aide, “He’s bitten off more than he can chew.”

The breakfast ended on one further note of conflict when Greenspan’s request for green Japanese tea set Clinton off on a chilling tirade. “You know, Alan,” he is reported to have said, “too much of that there stuff can fetch you up one mighty bad pain in the gut. You oughta switch to good old American-made coffee.”

Has this Administration lost patience with Japan’s foot-dragging in economic reform? Is the historic partnership crumbling at long last and will America henceforth go it alone? Greenspan’s rejoinder was both tantalizing and ambiguous: “Well, Mr. President, different strokes for different folks!”