Many medicines lose their potency and effectiveness after too many years on the shelf or table. Some pills, powders and capsules even become toxic. So it is with our monthly and yearly doses of Tincture of Greenspan. Even sugar pills lose their placebo effect if we rely
on them too long and too often and especially when we know the sugar has become overly sappy.

Psychologists tell us that last year’s stock market crash was bad for many people’s mental and emotional health. Russell Christopher, M.D., is a prominent psychiatrist with a busy Orange County and Palm Springs, Calif., clinical practice. Notes Dr. Christopher, “I am
seeing many more patients who are depressed from this 16-month financial disaster. This has been particularly hard on the elderly retired who have watched both their principal and income drop disastrously. Their expenses exceed their income and they keep falling further behind making them feel helpless and worthless. Also, they are unable to return to work and have too much time to obsess on their misfortune which only compounds the depression.”

“Other very disturbed patients, especially older ones, have had to put off their retirement after seeing their latest 401(k) statements.”

Christopher also sees many previously successful middle-age and younger patients who had retired early and planned to live comfortably on their investment income. “They can go back to work, but their plans, dreams and hopes are shattered. Although this group has alternatives, it is still very hard on them emotionally and they become very depressed.”

A June 28 WorldNetDaily commentary by Paul Sperry, entitled “Greenspan: Financial Wizard of Oz,” documents Greenspan’s gaffes. Here are a few relevant to this commentary:

  • “Greenspan is the most powerful man in the world. But when he makes mistakes – the 1987 crash, the 1990-91 recession, the 1994 bear bond market, and the current malaise – we all pay the price. …”

  • Sperry would cut him some slack “if he learned from his earlier mistakes in over-tightening credit to preempt what he saw as rekindling inflation, but that only ended up strangling the markets and the economy. But now he’s done it again.”

  • “In 1999 and 2000, when he ratcheted real short-term interest rates up to their highest level since just before the last recession, Greenspan sabotaged the greatest productivity-led boom in U.S. history.”

  • “And now he’s trying to turn back on the lights and restart the party.”

  • An endnote in the column reminds us that we’re stuck with Greenspan till at least June 20, 2004, but possibly longer.

The irony of all this is that the current interest rates at 5.55 percent are probably far below where they would have fallen had the Tincture of Greenspan never been applied liberally in the first place. As in clinical medicine it is far better and safer to prevent the ulcer in the first place than to try to cure it at a later date.

Part of the problem with Greenspan is that the American investor has lost faith and confidence in his ability to treat our national financial illnesses. This is comparable to a sick patient losing trust in his physician. Now, whether the tincture is used properly or improperly makes little difference. Investors have lost hope in their doctor and we know hope for the future is something that drives wellness in the stock market as well as in life.

The antibiotic medicine, tetracycline, is very effective against a variety of infectious illnesses that occur at home and abroad which is why many people take it with them on trips and store it in bomb shelters. However, as it ages it gets less effective and after many
years becomes toxic. In children it will yellow their teeth.

So it is with the Tincture of Greenspan. As physicians we don’t think this medicine is effective any more. Since we have lost faith in both the doctor and the medicine it is no longer useful even as a placebo.

We need to clean out the financial cabinet real soon. The patient can’t survive until June 20, 2004. The Tincture of Greenspan has been – and is – bad for our nation’s mental health and state of mind.

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