an Irrationally Exuberant Moment
Turns into the Right Moment…
Ross M. Miller
Miller Risk Advisors
April 19, 2004
The following transcript is fictional. Any resemblance to
Federal Reserve chairmen, NBC News on-air personalities, or Nickelodeon/Viacom
characters, living or dead, is purely coincidental. The author bears no
responsibility for losses, financial or physical, that may result from reading
this. You have been warned.
[An older man surrounded by binders and reports in a rainbow of colors is
sitting in bed next to a beautiful woman several years his junior who is using a
laptop computer with a peacock decal on its lid. The man looks up from a report
with a beige cover.]
Man: Did you know that 94.3% of the Swedish Fish
imported into the United States really come from Canada? And guess how many
Cuban cigars were confiscated by customs in Niagara Falls during the first
Woman: That reminds me. Have you taken your blue pill
Man: Twenty minutes ago. Still, another can't hurt. [He
reaches for the nightstand, picks up an oblong blue pill and a glass of water,
and swallows the pill.]
Woman: Do you really have to testify before Congress
this week? I'm flying out to LA to give a keynote address at the Infotainment
Expo. You're the most powerful man in the world, aren't you? Why don't you play
hooky and tag along?
Man: Power comes with responsibilities. You know that.
Did you also know domestic production of self-propelled lawnmowers increased
5.6% on a year-over-year basis?
Woman: Oh, Greenie, I love it when you talk stats to
me. But aren't you worried about inflation? What are you going to say when they
ask you about it? Last week's increase in CPI was uncomfortably large, wasn't
Man: Andrea dear, you should know better than to let a
single month's number concern you. It was all a statistical anomaly related to
clothing sales. There's still plenty of slack in the economy. Capacity
utilization is well below its historical mean and there's sufficient
unemployment to keep wages in check.
Woman: Speaking of wages, you may not think that
inflation is a problem yet, but you don't pay the bills. When I Google you,
I get all this important-sounding stuff—except for the crackpots who think
you're a space
alien—but when I Google myself,
I get all those tacky speakers
bureaus that I signed on with. Let's face it; the plumber makes more money
than you do. Those nice men from the drug company that just dumped Mike Ditka
called. They wanted to know if you were interested in replacing him. We could
use the cash and then I wouldn't have to fly around and give so many speeches.
Man: Forget it. I don't plan to retire and it will take
more than a rumor to get rid of me.
Woman: The drug company sent over some free samples in
case you change your mind. [She hands the samples to him. He opens them all,
stuffs several pills in his mouth, and chases them with another swig of water.]
Isn't it about time for you to raise the fed funds rate? With Dubya spending up
a storm and rates pegged lower than they've ever been in my lifetime, I would
think that that economy is already overheating.
Man: Even if it were, now isn't the time to cause
problems. Kerry hasn't been calling and offering you the VP slot again, has he?
Woman: Has he ever. It got so bad that Brian and I
swapped cell phones. John figures that because you stalled the recovery to get
Clinton into office back in '92, you might do the same for him.
Man: No one's proved that and you know that I only do
what's best for the economy. If I hike rates now, what with all the hedge funds
and their carry trades, I would probably drain so much liquidity from the system
that it would do a lot more than stall the recovery. Things must be done
gradually, especially with my chairmanship coming up for renewal in June.
Speaking of gradual, where are those pills that are supposed to last for 36
hours? [He rummages through the nightstand drawer, pours several pills from a
bottle into his mouth, and gulps them down with the last of the water.]
Woman: But if you don't act now, won't you risk the
chance that inflation will get out of hand like it did after Vietnam?
Man: Don't worry. I know what I'm doing. I'll give
Congress the usual song and dance without painting myself into a corner, throw
the usual bones to the financial markets to keep them from panicking, and then
raise rates when the time is ripe. You know how I feel about inflation—I hate
it more than anyone on this planet.
Woman: But inflation isn't all that bad, is it? Much of
the technology that goes into this little computer is based on scientific
discoveries that were made during the last inflationary boom. And don't forget
the Internet and disco. Companies facing higher prices for their inputs and
consumers who are unwilling to pay more are eager to employ new technology that
can cut their costs and improve everyone's standard of living. I think that
inflation can be a good thing for the economy.
Man: Andrea, you are such a bad girl! But I'm not in
the mood for playing the
monetarist-professor-and-his-naughty-Keynesian-grad-student game right now.
Let's watch some TiVo.
Woman: Why bother? Based on your viewing habits, pretty
much all it records are C-SPAN and SpongeBob.
Man: That's it! SpongeBob! He's just what the doctor
Woman: Well…okay. Just try not to get overstimulated
Man: Don't worry. If anyone can engineer a soft
landing, I can.
Copyright 2004 by Miller Risk Advisors. Permission granted to
forward by electronic means and to excerpt or broadcast 250 words or less
provided a citation is made to www.millerrisk.com.