Among his many talents, the soon-to-retire Fed head Alan Greenspan has developed a knack for, well, stating the obvious. Monday, Oct. 17th, in a talk with Japanese business execs in Tokyo, the chairman opined to the effect that -- and I quote -- " . the recent surge in energy prices will undoubtedly be a drag from now on."
To which the only proper response is: Well, duh.
To be sure, the meaning of "from now on" is subject to interpretation, and the financial punditocracy will no doubt spend copious quantities of airtime and column inches parsing that phrase with the same kind of rigor that baseball fanatics apply to box scores around this time each year.
Moreover, it's certainly worth noting that for folks who own shares of oil company gushers such as ConocoPhillips (NYSE: COP ) , ExxonMobil (NYSE: XOM ) , Chevron (NYSE: CVX ) , and BP (NYSE: BP ) -- all of which have posted double-digit gains thus far in 2005 -- one person's drag is another person's portfolio rocket booster.
Still, despite his predictable pronouncement, Greenspan, citing increased energy efficiency, declined to draw a close parallel between the 21st century's first energy crisis and the one that afflicted the globe back in the 1970s when polyester leisure suits were all the rage. Beyond that, the chairman also displayed his knack for reflexive, Adam "invisible hand" Smith-style logic.
Just in case anyone thought the law of supply and demand had been repealed, the chairman explained that energy use would likely decline if high prices persisted and noted that demand in the U.S. has fallen precipitously of late, "presumably partly as a consequence of higher prices."
"Presumably partly." That's language only a lawyer could love, even if it is obviously accurate.
Too obviously accurate, if you ask me. Indeed, these days I find myself waiting impatiently for Greenspan's successor, presumably partly because I think we could do with a Fed head who doesn't mistake politically correct banality for actual insight.
With that in mind, here's a suggestion: Robert Rubin, anyone? Back when he ran the U.S. Treasury Department, Rubin -- a former honcho at Goldman Sachs (NYSE: GS ) who now serves as the chairman of Citigroup's (NYSE: C ) executive committee -- had a keen ability for telling his higher-ups precisely what they didn't want to hear -- and of convincing them that he was right.
Could Rubin bring to the Fed that same knack for speaking the candid truth? Hard to say. And what's more, dyed-in-the-wool capitalist that he is, the guy is also a Democrat -- a political reality that no doubt severely limits his odds of getting the gig. Still, I'd love to see a deficit hawk like Rubin have a shot at the job. And it would be a deft and bold stroke of political genius on President Bush's part to give it to him.
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Shannon Zimmerman runs point on the Fool'sChampion Fundsnewsletter service and doesn't hold a financial position in any of the companies listed. The Fool is investors writing for investors. Read all about the Fool's disclosure policy by clicking here.
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