Learning to retire gracefully

Alan Greenspan still hasn’t quite realized that he is no longer in charge of US monetary policy. Rather than seeking a quite retirement, he has chosen to stir up controversy., complicating the job of his successor Ben Bernanke. On Tuesday, he told the Bloomberg news agency that there was a “one-third probability” of a US recession this year. Unfortunately, the former Federal Reserve chairman’s comments doesn’t quite rhyme with the upbeat and optimistic assessment of the US economy made by Helicoptor Ben.

Mr Greenspan’s latest remarks come a week after he told investors that he thought a US recession this year was “possible”. The earlier comments destabilized financial markets, leading to a global sell off. Somewhat later, and too late to stop the slide in equity prices, Mr Greenspan clarified his statement, declaring he had said that a recession this year was “possible” but not “probable”. Indeed, all things are possible.

Greenspan on Tuesday told Bloomberg he was “surprised at this recent episode”. He said: “I was aware of the problem that if I stayed public I could make it difficult for Ben. For the most part it has worked. I was beginning to feel quite comfortable that I was fully back to the anonymity I was seeking.”

He said there were signs that the US’s economic expansion was ageing, not unlike the former chairman. “We are in the sixth year of a recovery. Imbalances can emerge as a result,” he said. However, the former chairman declined to link these emerging imbalances with anything he might have done while in charge of the Fed.