Article: Greenspan and Fed Won't Play Politics With Interest Rates

The Federal Reserve's trimming of the interest charged for overnight loans between banks by .25 percent recently had many economic experts wondering why the Fed even bothered.

Typical was the reaction of economist Ken Goldstein of the New York-based research group the Conference Board, who told the Sun-Times (news story, July 7) that the rate decline "is so small that it makes you scratch your head. What are they telling us?"

When viewed through the prism of presidential politics, however, which already is driving everything in Washington, the decision is wise. What the Fed and Chairman Alan Greenspan are telling us is that they will not be "biddleized."

In the late 18th and early ...

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