The Maestro, Alan Greenspan, has a new book slated to hit shelves Oct. 22. Its title: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting.
No doubt an easy book to write in hindsight. The description on Amazon extols the wisdom contained between its covers.
'Alan Greenspan,' it reads, 'embarked on a rigorous and far-reaching multiyear examination of how Homo economicus predicts the economic future, and how it can predict it better.'
'Greenspan's approach,' the description continues, 'grounded in his trademark rigor, wisdom and unprecedented context, ensures that this particular map will assist in safe journeys down many different roads, traveled by individuals, businesses and the state.'
[Sitcom laughing crowd sound effect]
The Maestro's better book of forecasting comes 14 years after he testified to Congress that prior failures to correctly predict the future do not guarantee future failure.
'The fact that our econometric models at the Fed, the best in the world,' reads the autumn public record in 1999, 'have been wrong for 14 straight quarters does not mean that they will not be right in the 15th quarter.'
[Even louder laughing sound effect, with one guy laughing really obnoxiously]
Most of the congressmen scratched their heads that day...it didn't strike them that Greenspan was touting a success rate of 7%, if that. But that was then. This is now. What does the Great Moderator have to say about the present?
From The Map and the Territory:
'Our highest priority going forward is to fix our broken political system. Short of that, there is no viable long-term solution to our badly warped economy.'
Heh. That'll be $28.04, please.
Note to Ben Bernanke: Here's a seven step guide to a successful career as a successful central banker:
1. Ride the wave in the good years.
2. Get yourself a neat nickname like 'The Maestro'.
3. Become Time magazine's Person of the Year.
4. Stay alert so you can see the stall light start flashing.
5. When you see that light flashing, grab a parachute and bail.
6. Wait some time out of respect for the bust and then write books about how to fix the problems that started soon after you left office.
7. Get an $8.5 million advance.
We'd say Bernanke's in Step 5 right now. For future reference, we suggest a few book titles:
Money Doesn't Grow on Trees, Duh!... That's What I Said, but What I Meant Was... or The Exit Is This Way.
Meanwhile, the Federal Reserve's balance sheet stands at $3.6 trillion and growing.
James Bullard, St. Louis Fed president, teased that the Fed could start tapering next month. Other talking heads think there's a chance that politicians could allow the federal government to default on its obligations. We won't hold our breath.
Our opinion remains firm: Tales of tapering and default are a heap of horse stool.
for The Daily Reckoning Australia