News that U.S. President George W. Bush intended to support the continuation of Alan Greenspan as chairman of the Federal Reserve Board of Governors was greeted with wide support. However, if Greenspan cares about his place in history, he might be wise to decline the offer.
As it is, Greenspan's reign as chairman of the Fed will be remembered for the asset bubbles that occurred during his watch. His departure as monetary helmsman for the world's largest economy should be sooner rather than later so that the burden of blame of a pair of other bubbles falls on his successor.
The first Greenspan bubble was the dot.com boom that collapsed into what is likely to become known as the Great Correction for its intensity and longevity. Despite noting irrational exuberance at work in stock markets, he opened up the credit taps in 1998 and allowed things to really get out of hand. After two mostly-bearish years, the Dow Jones average never went below the level when this famous utterance was made.
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