A Tale of Two Chairmen

He was the best of Chairmen, he was the worst of Chairmen. It was an age of heroes, it was an age of villains. We were all retiring at 30, we were all working until we dropped.

It’s fascinating to watch the transformation of Chairman Greenspan from Maestro to mud. Ten years ago news hounds hung on his every word. Now….

What a difference a decade makes! Over the last several days, the former Chairman has endured criticism from lucky hedgies, wannabe regulators, and longtime political foes over the Fed’s role in the crisis. To his credit, Greenspan admitted that he stood in stunned disbelief at the failure of market mechanisms to control the risk of securitized substandard mortgage loans. How have the mighty fallen!

At the same time we see the current Chairman, Ben Bernanke, earnestly imploring our lawmakers to put us on a road to long-term fiscal health. Our current level of government requires tough choices: cut spending or raise taxes. While the recovery is fragile right now, Bernanke admonished that if we kick the can down the road and opt for short-term growth over long-term stability we will end up with neither.

Two Chairmen. Two messages. One overarching lesson: humility. We don’t know the future. But we have the tools to be ready.

Douglas R. Tengdin, CFA
Chief Investment Officer
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