Wall Street, chilled by the prospect of several seasons of wintry revenue forecasts, despondent over foundering stock indexes, and possibly projecting its depression onto the American consumer, sees another closing of wallets coming. With the economy admittedly teetering but not yet falling on its face, Greenspan has made it clear that he thinks a firm but gradualist easing is enough until the Main Street news gets worse. And Greenspan is managing all this while battling the rest of the world in what is shaping up as a Japan-led rematch of 1997. With Asian and European investors still holding more faith in Greenspan and his U.S. track record than in their own economic leaders and prospects, the dollar has stayed strong amid all the rate-cutting, making U.S. manufacturers' lives even more miserable than normal. Then there are the woes at home.
Summer promises power failures in the world's sixth-largest economy, California.
And at a time when U.S. consumers will be taking a hard look at their vacation budgets, OPEC is cutting oil production in anticipation of a worldwide demand slump. In a cruel twist of irony, the U.S. could find any attempted summer comeback choked off by high prices at the pump. The markets are crying out for leadership, and with Tuesday's cut Greenspan stated with some plainness that he will not be providing any. If Greenspan turns out to be right, by summer U.S. businesses will be able to imagine healthy growth again, the markets will embark on a slow and steady bull run, and sometime in early 2002 Greenspan will be acknowleged, with fresh awe, to have Done It Again. The problem is if the bad consumer news does come, it may already be too late.