“What does that mean?”
The little man’s expression became astonishingly sharp when he focused
on the agent’s face. “It means that it is never wise to follow placidly
along when good judgment should dictate otherwise.”
Sawyer leaned back in his chair. “Meaning you didn’t agree with
Lieberman all the time.”
Tiedman was not looking at the agent now. His features betrayed what he
was thinking, however. It was clear that he now intensely regretted
ever allowing this interview.
“Meaning’ that members of the Federal Reserve Board are placed on that
board to exercise their own minds and their own judgments and not to
blindly succumb to arguments that have little basis in reality and could
lead to disastrous consequences.”
“That’s a pretty big statement.”
“Well, it’s a pretty big job we have.”
Sawyer referred to his notes from the conversation with Walter Burns.
“Burns said Lieberman took the bull by the horns early on, to get the
market’s attention, to shake it up. I take it you thought that wasn’t
such a good idea.”
“Ludicrous would be a better term.”
“If it was so off-the-wall, why did a majority go along?” Sawyer was a
little skeptical.
“There’s a phrase that critics of economic forecasting like to use: Give
an economist a result you want, and he’ll find the numbers to justify
it. This entire city is filled with number crunchers who look at the
exact same data and interpret it in widely disparate ways on every thing
from the federal budget deficit to the Social Security surplus.”
“Meaning that data can be manipulated.”
“Of course it can, depending on who’s paying the meter and whose
political agenda is being furthered,” Tiedman said with asperity.
“You’ve no doubt heard the principle that for every action there is an
equal and opposite reaction?” Sawyer nodded. “Well, I’m convinced its
genesis is political rather than scientific.”
“No disrespect, but could it be they thought your views were wrong?”
“I am not omniscient, Agent Sawyer. However, I have been intimately
involved in the financial markets for the last forty years. I have seen
up and down markets. I have seen robust economies and ones teetering on
collapse. I have seen Fed chairmen take prompt, effective action when
confronted with crisis and I have seen others flounder badly, with the
result that the economy gets tipped on its head. An in-advised
half-percent increase in the Fed Funds Rate can cost hundreds of
thousands of jobs and absolutely devastate whole sectors of the economy.
It is an enormous power that must not be exercised lightly. Arthur’s
zigzagging with the Fed Funds Rate placed every American citizen’s
economic future in serious jeopardy. I was not wrong.”
“I thought you and Lieberman were close. Didn’t he ask for your
advice?”
Tiedman fingered his coat button nervously. “Arthur had previously
sought out my counsel. Often. For a period of about three years he
stopped doing that.”
“Was that the period during which he played roller-coaster with the
rates?”
Tiedman nodded. “I finally concluded, as did others on the board, that
Arthur was punching a lazy financial market flush in the face.
But that is not the board’s mission, it’s far too dangerous. I lived
through the last stages of the Great Depression. I have no desire to do
so again.”
“I guess it never occurred to me how much power the board wields.”
Tiedman looked sternly at him. “Do you know that when we decide to
raise rates we can tell fairly precisely how many businesses will
declare bankruptcy, how many people will lose their jobs, how many homes
will be foreclosed? We have all that data, neatly bound, carefully
studied. To us it’s only numbers. We never, officially, look behind
those numbers. If we did, I don’t think any of us Would have the
stomach for the job. I know that I wouldn’t. Perhaps if we started
tracking suicide, murder and other criminal statistics, we would be more
understanding of the vast powers that we hold over our fellow citizens.”
“Murder? Suicide?” Sawyer looked at him warily.
“Surely you would be the first to admit that money is the root of all
evil. Or perhaps more accurately stated, the lack of money is the root