Pushing on Strings

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The minutes for the June 26-27 Fed meeting came in Thursday, and to the extent they revealed the inner workings of a Fed meeting (they don’t; that’s why the FOMC releases minutes on a one-meeting lag and the transcripts on a five year lag) they basically bear out what everybody figured about that slightly mysterious gathering. So why did the Fed put an end to its 50-points-a-meeting regime of the spring with a 25-basis-point cut — and release a statement that gave no indication why? Because, the minutes say, the members feared sowing too many inflationary seeds that could sprout next spring, and because they figured they’d done about all they could do for a slowdown that, after all, wasn’t going to last forever.

Tuesday, Aug. 21, Greenspan and the FOMC, getting no sign that their previous six cuts had had any effect, cut the other 25 basis points.

It’s been that kind of week. Wall Street has a saying that "You can’t fight the Fed." For the Fed, there’s an expression for when its monetary policy has had no luck fighting Wall Street, when short-term rate cuts run up against an unwillingness to spend the cheaper money, or when bond traders stubbornly keep longer-term rates high because they think the Fed is sowing long-term inflation. It’s called "pushing on a string."

Familiarity breeds euphemism; the Eskimos, they say, have 50 words for snow; in the Middle East they’ve got 88 for God. The Fed has its term for futility, and these days we have been hearing it a lot lately. But the great need — the market imbalance, as it were — is for a few more euphemisms for futility in Washington politics, where it is as common as comb-overs.

Donald Rumsfeld arrived at the Department of Defense with a reputation as a formidable Beltway get-things-done-er, the only man Henry Kissinger feared facing at the negotiating table. He’d even held the job before. And so when George W. Bush told him to tackle the most overdue job in town — redesigning the military along post-Cold-War lines, and securing the cooperation of Congress and the Pentagon to make it happen — everybody figured Rummy had at least a fighting chance.

Last Friday, Rumsfeld apparently surrendered, turning decisions on force reductions (which, thanks to the straitened fiscal situation in Washington, are necessary to pay for restructuring) over to the heads of the individual services, who are expected to decide not to reduce forces at all. To his credit, Rummy spent this week claiming he is still in there fighting — which doubtless he is — and explaining rather tortuously why he hasn’t even lost a battle.

"Saluting into the wind?"

Paul O’Neill came into the Treasury Department looking to change just about everything. He spent a month enforcing Department ergonomics, questioning the strong dollar and making fun of day traders, and talked a lot about reforming the tax code along more, shall we say, decipherable lines. He also insisted that with him around, there’d be no more willy-nilly throwing of taxpayers’ hard-earned money at floundering third-world economies.

Wednesday, O’Neill signed off on an IMF plan to provide $8 billion in new loans for Argentina, on top of $13.7 billion package the country received just eight months ago.

"Shrugging and hugging?"

Now, this is not to take a stand either for or against what Rumsfeld and O’Neill were out to do — although I do find both men’s quest on the sympathetic side. That is not the case with the week’s third case, Gary Condit.

Or, rather, the rest of you. The press warned you he wasn’t going to say anything besides play the old politician’s skin-saving game of grabbing the camera and saying nothing. We warned you Connie Chung wouldn’t even come close to a Perry Mason moment. We warned you that the interview would be the opposite of illuminating — it would, in fact, be utterly depressing to see a two-bit congressional Lothario dig himself deeper into shame by refusing to have any shame at all. We warned you that if you had any distaste left over from impeachment (which at least starred the President of the United States, and a great performer at that) to boycott the whole sham and rent a movie.

The audience for the Condit-Chung interview was estimated by the Nielsen folks at 23.6 million viewers.

"Expletive deleted?"