I am all for transparency in government. Thatâ€™s why I may have expressed some skepticism, in the past, over how the Federal Reserve operates.
Alan Greenspan, former and most famous Fed chairman, was especially . . . opaque. He spoke as if he were trying not to communicate.
He could be clear, though. He said that, if he had his druthers, he would dissolve the Fed and go back to the gold standard.
But his prognostications and explanations of economic movement and Fed policy were more like something out of the Journal of German Metaphysics rather than designed to be understood by citizens and their representatives.
Now, maybe we should be amused by how Greenspan played his tough job, as Obfuscator in Chief. Thereâ€™s this idea of expectations in economics, which says that if the people know whatâ€™s going to happen with money, theyâ€™ll discount the policy, and render much of its intentions without effect.
Greenspan obfuscated for a reason.
Now we learn that his PhD thesis is unavailable, kept in a locked vault. In a new book, Deception and Abuse at the Fed, author Robert Auerbach argues that this secret thesis is â€œsymbolic of a career marked by prevarication, cover-ups and a general aversion to making the Fed more publicly accountable.â€ Thatâ€™s how an article in Barronâ€™s explained it, anyway. I think Iâ€™m siding with Auerbach.
But also with Greenspan. You know, the Greenspan who preferred the â€œtransparencyâ€ of the gold standard. Or some kind of standard.
This is Common Sense. Iâ€™m Paul Jacob.