Central bankers are not omniscient. But are they omnipotent? If Alan Greenspan can solve all the problems of the U.S. boom by simply lowering interest rates, then he might well be a magician. But what if it turns out that all central bankers really do is lead, follow or get out of the way? When the going’s good, they are the bringers of “stable, noninflationary growth.” They support the economy by lowering interest rates. They don’t write labor laws; they don’t stop stock bubbles from bursting. They certainly can’t turn the money flow on and off like a faucet. If that’s true, then the economy isn’t going to come back too fast–and neither will the reputations of Al, Eddie and Wim.
