Baffling the Europeans

The Times (London) features a column today by Anatole Kaletsky, the paper's erstwhile economics editor, who ponders a question that has long baffled the European elite: "The President is a dolt—so how can America be such a success story?"

That President Bush is a moron is, to Mr. Kaletsky, axiomatic: "For the past five years, America has been led by a president who is clearly not up to the job—a man who is not just inarticulate, but lacking in judgment, intelligence, integrity, charisma or staying power."

What mystifies him and his fellow Europeans is why the drooling idiot at 1600 Pennsylvania Avenue hasn't, in the course of five years, managed to reduce the American economy to a heap of smoking rubble? In fact, he freely admits, "America as a nation seems to be stronger, more prosperous and self-confident than ever."

But, if Dubya is a hapless Bertie Wooster, then surely there must be some gentleman's gentleman lurking in the background who is constantly putting matters to right and making sure that every misadventure ends happily. Is this Jeevesian figure Dick Cheney? Karl Rove? Colin Powell? (Oh, that's right, he already got the sack.)

No, it's been the sphinx-like chairman of the Federal Reserve who has successfully steered the American ship of state through the stormy seas of the past half decade:

Mr Greenspan realised that his job at the Fed was not just to control inflation, the goal that other central bankers recognise. His real task, he explained last year, was “to achieve the maximum sustainable economic growth, with price stability pursued as a necessary condition to promote that goal”. Although a passionate advocate of small government, he realised that well-judged public intervention was necessary, not just to maintain stable prices but also to create the incentives for private enterprise to accelerate economic growth. He also understood that the best way to deal with the imbalances in the changing world economy was by supporting growth and allowing the greatest possible freedom for financial markets. Private investors, he believed, were more likely to find solutions to the complex challenges created by globalisation than central bankers or politicians.

But while Mr Greenspan believed that private incentives solve economic problems more successfully than government diktats, he also understood that capitalism works at its best if it operates in a sound, simple framework of ambitiously pro-growth monetary policy. His genius was to understand that public policy could be simultaneously minimalist and ambitious. In a sense, this is the genius of the American system.

He ends his tale in storybook fashion: "And this is why America does not need a genius in the White House."

Now, Mr. Bernanke, it's all on you. Stiff upper lip, old chap.