of producing very low unemployment (4.3%) without causing inflation and Greenspan has had the good sense not to blow it (Chait 22). Recently, the Fed has been attempting to slow the U.S. economy and guard against accelerating inflation. On November 16, 1999, the Fed raised its federal funds rate one-quarter point to 5.50 percent. This has been the third quarter point increase within the last five months. Also, the discount rate was raised a quarter point to 5 percent, the second increase this year (Goldman 1). Alan Greenspan and the other policy makers do not want consumers to spend so much. They are trying to diminish the risk of inflation. Chris Grisanti, Director of Research with Spears, Benzak, Salomon & Farrell said, Theres some nice symmetry because now weve taken back the 75 basis points Greenspan gave us last year (Fig. 2) (Goldman 4). Another difference that Greenspan has made is relationship with the White House. The Fed wields more influence over the White House than ever before. Basking in Greenspans brilliance has become a cherished congressional ritual. (Chait 24) In 1978, Congress mandated that the Fed chairman testify twice a year so that he could be held accountable for his monetary policies. Traditionally, Congress has taken this opportunity to grill the Fed chairman. Today, things have changed; the senators are more inclined to compliment him that to query him during these meetings. The topics of their questions have included topics such as; paying off the national debt, the Japanese economy, and the year 2000 computer bug. Very few Senators ask Greenspan about monetary policy, which is the reason that the hearings exist in the first place. In a hearing held in February of 1998, only one senator asked him about monetary policy. Everybody else feels like its not his or her place to tell Greenspan how to do his job. (Chait 24) In addition, the hearings are now a way of soliciting Greenspans benediction for...
