As I have noted before, the attitude of Alan Greenspan towards what is a thinly disguised fiscal crisis is somewhat strange. A few weeks ago, he made comments on the debt loads of the two semi-private mortgage companies and their debt structures. Advising companies how to structure their debt is not actually one of Chairman Greenspan's duties. However, it is still fairly within his area of expertise.

Recently, however, he seems to have stepped ever further outside of areas he could be considered to be an expert on. On March 11th, 2004, he gave a speech to Congress on the effects of education on the workforce. While I am sure that Chairman Greenspan has a very wide knowledge of a number of fields, he is perhaps not fully qualified to speak about education, especially when his primary duty, making sure the United States' economy remains stable, seems to be unfulfilled.

His remarks, of course, did not occur in a vacuum. One of the largest political issues this year, other than the war in Iraq, is the fact that the economy has lost over two million jobs in the currently acting administration. While these figures may not be exactly acccurate, it is still rather unusual to have massive tax cuts and 1% interest rates and not have any noticable job growth. This, of course, has been one of the major issues on Senator John Kerry's campaign, with talk of possibly doing something to restrict the loss of jobs to overseas areas. From a traditional economic point of view, this is unsound, since the cost of keeping jobs here leads to higher prices, which, on the whole, mean the economy has less wealth to distribute. However, because of cultural and other factors, protecting jobs is a political issue that can be capitalized on.

Alan Greenspan in his speech before congress, which he later repeated at a conference in Boston, pointed out that the United States has always seen steady employment over the past century, with some fluctuations, and that as the economy shifted from agriculture to industry, people got more education and were thus able to find new jobs. The point seems to be that the moving of manufactring jobs overseas is inevitable, and the best way to deal with it is to reeducate the workforce.

All of which is fairly obvious. In the long run, we can't keep our industry inefficient and employing large amounts of people any more than we could have kept one third of the population living on farms. However, Chairman Greeenspan seems to have very little to say specifically about education. All he mentions is a single study saying that 4th graders are doing relatively better in science than 10th graders, and that we better do something to get those test scores up. Whether Chairman Greenspan is actually trying to make an oblique statement in favor of the "standards" craze in education remains to be seen.

The problem with his testimony is that, as if often the case with members of the older generation, they can't comprehend the glut of both skilled workers and of the products they can create. As I have mentioned before, there is actually no shortage of educated people in this country, or of the things they can produce. Although my personal experience may be a little biased, I have seen people with no prior experience pick up the basics of computer hardware in a month or two. I am sure that most people reading this need only consult their personal experience to find a host of people with both formal education and various marketable skills that have a problem finding a job to use them.

This is, of course, due to the fact that some of the basic premises of economics are breaking down. While people of Chairman Greenspan's age grew up in an era when capital and commodities were both scarce, in the current economy capital seems to be getting scarcer while commodities are getting more and more easy to obtain.

Even the best economists in the world are having trouble dealing with understanding this, let alone finding a way to cope with it. The current administration is running up a national debt that is getting very close to being a Ponzi scheme. Even without a major economic transformation underway, they seem to lack the skills neccesary to balance the economy. With the current change, only America's workforce and history of stability has prevented the economy from collapsing yet. For Chairman Greenspan to suggest facile treatments such as "a better trained workforce" when he can't fulfill his primary role of making sure the economy is balanced, making such comments seems somewhere between silly and dishonest.

Log in or register to write something here or to contact authors.