Oil prices soar above $50 a barrel with little prospect of returning to more normal levels anytime soon. Not to worry, says Fed Chairman Alan Greenspan, new sources of energy are just over the horizon.

House prices continue rising several times as fast as everything else, driven by record levels of household debt. Not to worry, says Greenspan, the debt is manageable and housing isn't susceptible to speculative bubbles.

The nation's current account deficit heads toward 6 percent of gross domestic product , a level unheard of for a major industrial economy. Not to worry, says Greenspan, financial markets will gradually bring things into balance.

The urgent question before us today is: What has the chairman of the Federal Reserve been smoking?

I will leave it to others to speculate on Greenspan's motive for taking his one-man Dr. Pangloss show on the road in the months leading up to a hotly contested presidential election.

But what are we to say about a Fed chairman whose biggest economic concern a few years ago was that the government was projected to run such a big budget surplus that it could eventually force the Treasury to invest some of it in corporate stocks and bonds? There aren't too many people worrying about that one any more.

Of course, one reason we're worrying about record deficits rather than record surpluses is that Greenspan gave his seal of approval to a series of tax cuts that the country could ill afford.

Two possibilities present themselves:

* Greenspan figured that, once the tax cuts were in place, Congress would cut spending to match, in which case he's more of a fool than anyone imagined.

* He knew all too well that the spending cuts would not follow, in which case he's a scoundrel.

I leave it to you to judge.

The fact is that, as an economic prognosticator, Greenspan has been about as effective as a Cardinal trying to hit Red Sox pitching.

In 1990, he underestimated the economic impact of the bursting of a commercial real estate bubble and the ensuing credit crunch, which combined to throw the economy into recession.

And during the late 1990s, he was so busy touting the productivity miracle of the new economy that he failed to see the biggest equity bubble in history developing right under his nose. And when it finally burst and began to take the real economy down with it, Captain Greenspan was confidently predicting a soft landing almost until the moment the wheels came off the landing gear.

As it turns out, Greenspan is a better rhetorician than he is a forecaster. In his recent speeches and testimonies, he cleverly frames his what-me-worry message in apposition to the more extreme doomsayers who warn that the world is about to run out of oil or that foreign investors are about to trigger a financial meltdown by dumping their dollar assets. He's also careful to include hedges and caveats that he can point to when things don't turn out as swimmingly as he suggests.

But through it all, the consistent message is that global financial markets have become so gloriously efficient and flexible in pricing risk and intermediating capital that they can cushion any shock, correct any imbalance and cure your lumbago besides. In the World According to Greenspan, the only real threats come from those who would tamper with this machinery by reversing the march toward deregulation, open markets and the free flow of capital.

Unfortunately, what Americans desperately need now is not a Fed chairman pushing an ideological agenda -- not a Paul Wolfowitz of economic policy -- but a clear-eyed pragmatist willing to tell Americans the truth that nobody else dares: That they are living beyond their means, that their profligacy has put the global economy out of whack and that the only way to avoid a bad ending is to save more, import less, raise taxes and accept lower levels of government services and benefits.

Steven Pearlstein can be reached at pearlsteins@washpost.com.