Federal Reserve Chairman Alan Greenspan's term doesn't expire for another six months, but that hasn't stopped presidential candidates from offering President Clinton advice on reappointing him to a fourth four-year term as head of the central bank.
Their comments have ranged from replacing Greenspan because he's doing a lousy job (Steve Forbes) and thinking others could do just as well (Bill Bradley), to enthusiastic endorsement for his "outstanding A-plus-plus performance" (Al Gore) and extremely enthusiastic endorsement (John McCain).
During a Republican debate earlier this month, the Arizona senator said, "If Mr. Greenspan should happen to die--God forbid--I would do like they did in the movie 'Weekend at Bernie's.' " Referring to a comedy in which two men take over a dead man's beach house, he said: "I'd prop him up and put a pair of dark glasses on him and keep him as long as I could."
And President Clinton? When asked about Greenspan's future at a news conference in July, he said: "I have, as you know, enjoyed a very good relationship, both personally and professionally, with Mr. Greenspan. I think he has done a terrific job. I have no idea whether he would even be willing to serve another term."
He added that he expected to decide in a "timely fashion." That, it turns out, is just what he is doing.
An announcement is likely to come by March, maybe sooner. And given the country's combination of strong economic growth, low unemployment and low inflation, coupled with the excellent working relationship between Greenspan and the president and other top administration officials, there appears to be no reason to doubt the Fed chairman will be reappointed.
The only other person the White House likely would consider is former Treasury secretary Robert E. Rubin, who also was chairman of Clinton's National Economic Council. But Rubin, who gets along famously with Greenspan, has never expressed any interest in the Fed job. Moreover, a few weeks ago he joined the financial services giant Citigroup Inc., as chairman of its executive committee.
Greenspan won't comment on whether he would like another term, but he has given no hint that he is ready to leave the Fed, according to close associates. He will be 74 when his current term ends next summer. But except for a back he sometimes strains as he plays hours of tennis most weeks, he appears to be in excellent health.
Given the importance of the Fed's role in managing the economy, it's not surprising that the Fed chairmanship is of such interest to would-be presidents.
A president's approval rating, after all, often mirrors the performance of the national economy. That's something Texas Gov. George W. Bush, the favorite for the Republican nomination, no doubt learned from watching the effect a sluggish economy had on his father's reelection chances in 1992.
Angry at the Fed's refusal to cut interest rates more rapidly, President George Bush delayed his reappointment of Greenspan for several months in 1991. The White House staff readily acknowledged then that the delay was intended "to teach Greenspan a lesson."
During the summer, however, Lawrence B. Lindsey, a former Fed member and Gov. Bush's principal economic adviser, wanted no such delay. He said, "The governor would like the president to make clear at the earliest moment that he intends to reappoint Greenspan. It would reassure the markets and be good for the country."
In 1987 a delay had consequences. President Ronald Reagan's White House staff publicly expressed so many doubts about whether Fed Chairman Paul A. Volcker deserved reappointment that when at the last minute Reagan finally offered him the job, Volcker turned it down.
A few commentators have suggested that Clinton hasn't already announced Republican Greenspan's reappointment because of Democratic party politics. When Greenspan last faced a confirmation vote in the Senate, in 1996, seven Democrats, mostly from the upper Midwest, voted against him after taking several hours on the Senate floor to make their case.
Sen. Byron L. Dorgan, of North Dakota, said in an interview that he would oppose Greenspan again. "There is this great myth that has grown up around Greenspan's leadership at the Fed," he said. "And everyone is tiptoeing around because they fear the financial markets might react" if he's not reappointed.
"Well, he was consistently wrong about how low unemployment could go, and he was consistently wrong about economic growth. I think my Uncle Joe could have done a good job during this period."
Maybe not Uncle Joe, but Bill Bradley said in a USA Today interview this month, "The reality is that there are a lot of other people in the country who could also do a good job" and in whom financial markets would have confidence. If Clinton delayed making an appointment and Bradley became president, he might not pick Greenspan again, he said.
That was a shift for Bradley, who said in a television interview in August, "I would urge the president to reappoint him next year."
During the GOP candidates' debate in Phoenix earlier this month, Steve Forbes said that Greenspan has "fallen prey to this crazy theory that prosperity causes inflation. So they're trying to slow the economy down by raising interest rates. It's like a doctor saying you're in great health, so we have to make you sick a little bit. It's a bizarre theory. It's going to hurt our economy."
It is clear that Clinton doesn't agree with Dorgan or Forbes and has given no hint he agrees with Bradley. Though he has had to bite his lip at times over Fed interest rate moves, he and Greenspan, with the help of Rubin, have developed a good relationship.
Clinton and his aides well remember Greenspan's broad support of the president's 1993 deficit reduction plan, which passed Congress by a single vote with Republicans unanimously in opposition.
When the Fed started raising interest rates at the beginning of 1994 to cool a surge in economic growth that threatened to increase inflation, Clinton wasn't pleased. But the administration had adopted a firm policy of not commenting publicly on Fed actions, and the president kept silent.
Clinton also chafed at statements by Greenspan and other Fed officials indicating that they believed the economy should grow only moderately to keep inflation under control. Moderate growth didn't appear likely to produce enough tax receipts to reduce the deficit substantially and leave room for Clinton's domestic spending plans.
Some analysts have suggested that Clinton and top aides were unhappy with Greenspan's opposition to his proposal to invest a portion of the Social Security trust fund in the stock market. But administration officials were well aware of his views before the idea was made public.
In fact, they were much more impressed by the Fed chairman's support for maintaining large federal budget surpluses to pay down the national debt and his strong opposition to the $800 billion tax cut offered by congressional Republicans.
And as it has turned out during Clinton's time in office, the combination of sharp productivity gains, a major swing in the budget from big deficits to big surpluses and Fed patience with rapid growth, along with very low unemployment and a soaring stock market, have left the economy in excellent shape.
Clinton alluded to this when asked about Greenspan at a July news conference. "We believe that as long as the United States is fiscally responsible, then the Fed will respond to developments in our own economy and the world economy in a way that is clear, transparent and, I think, designed to keep our growth going."
Hardly the words of someone who intends to overhaul the leadership at the Fed.
1987: Greenspan appointed chairman of the Fed by President Reagan.
1992: Greenspan reappointed to another four-year term by President Bush.
1996: Greenspan reappointed to a third four-year term by President Clinton.
2000: Clinton likely to reappoint Greenspan once more.
CAPTION: Fed chairman Alan Greenspan. President Clinton is expected to make a decision on his reappointment by March, perhaps sooner.