The Day the Grinch Grudged

Happy anniversary.

A year ago today, the grinch grudged. Alan Greenspan finally cut interest rates one-half of a point on Jan. 3, 2001.

Other cuts would follow. Lots of 'em. By year's end, short-term rates that began 2001 at six-and-a-half percent, would end 2001 at one-and-3/4 percent.

Staggering. Especially for a guy known for being tentative and cautious. But if you think I'm here to praise the world's so-called most brilliant economist, think again.

Why are we only now celebrating this anniversary? By my math, all this cutting should have started two years ago, not a year ago.

Yes, it's easy to play Monday-morning quarterback, but at least let it be written and said, that this reporter wrote and said two years ago that rates were high and that continuing to raise them was foolish. And trust me, I'm no brainiac.

But what I saw then, I do fear now ... that we get hung up on prices going up. Way, way, way to our detriment. I didn't see inflation then. I don't see inflation now.

Mr. Greenspan, for good reason, fears its reemergence. Nothing eats away at the value of goods and services like prices run amok. But can you overdo it trying to prevent it? I think you can. And I think we did.

Lesson learned. It's one thing to stop inflation before you see the whites of its eyes. It's another to torpedo the economy even when you clearly see the buckling of its knees. Mr. Greenspan will never admit he botched it. But his actions a year ago today indicate he knew it. What he did since proves it. He was scared then. He's probably praying now.

The good news is that I think it's all working out. Most numbers are improving. We're through the worst of it. And no Alan, not because of you, but despite you. So happy anniversary ... not to rates going down, but to waking up.

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