It's Rational

WASHINGTON, D.C: This time around, says TIME's Wall Street columnist Daniel Kadlec, it was more important what Alan Greenspan didn't say to Congress. "There was nothing like the 'irrational exuberance' line. Things are going well, and he could have killed it. But he didn't." Not that the Grinch of Wall Street has suddenly gone pie-eyed over the invincible new economic order. Bristling slightly, he insisted the Fed "is not, as some commentators have suggested, involved in an experiment that deliberately prods the economy to see how far and how fast it can grow," Greenspan said. "The costs of a failed experiment would be much too burdensome for too many of our citizens." Does that mean the Fed will raise rates at its August 19 meeting? Kadlec doesn't think so. "He's got nothing to latch onto. There is no sign of inflation, and the economy still seems to be slowing. The only worrisome area is labor, where the scarcity of workers might push wages up, but even that's just minuscule right now." Reassured investors sent the Dow up 154 points on the day for a new record close of 8061.65. Kadlec says Greenspan has softened in one way: he'll let traders have their fun. "I think mainly what Greenspan signaled today is that these days, he needs more than just an inflated Dow before he steps in and pricks the bubble," Kadlec says. "He needs something else. And everything else is OK."