Letters.

Greenspan Slammed

To the Editor:

I was disappointed to read the criticism of Alan Greenspan in Deroy Murdock's column, "CEOs Speak Out Against Greenspan" (CE: March 2001). There's confusion about the tasks and responsibilities of the Chairman of the Board of Governors of the Federal Reserve System, as well as lack of acceptance of the causes of the current economic malaise.

First, let's separate the general difficult economic climate from the dramatic stock market decline. Of course they are interrelated, but the stock market drop is obviously a correction after two years of NASDAQ mania. John Kenneth Galbraith stated it very well in his 1954 analysis of the Crash of '29:

"Speculative episodes have occurred at intervals throughout history, and the length of the time intervals is perhaps roughly related to the time it takes for man to forget what happened before."

Speculators don't learn from history. The 1979-80 silver mania orchestrated by the Hunt brothers carried gold, briefly, to $800 per Troy ounce; the correction of NASDAQ has pulled the Dow down with it--but that's a temporary situation.

Greenspan clearly didn't do anything to fuel NASDAQ mania and there's nothing he should have done to alter the inevitable bursting of the bubble.

W. J. Streeter

President

Western Lithotech

St. Louis, MO

Murdock responds: If there's any confusion about the "tasks and responsibilities" of the Chairman of the Fed, it is within Alan Greenspan's head. His job is to maintain a stable overall price level-period. He's not supposed to worry about exhuberance, rational or otherwise, or erect a glass ceiling above American prosperity. The three letters on Greenspan's mind should be CPI, not Dow. Had Greenspan stuck to the knitting rather than poke his nose in places it did not belong, he would not have engineered the credit crunch that has turned the exhuberance he decried into the anxiety currently on vivid display.

CEO Turnover

To the Editor:

In the article, "Paradox at the Top" (CE: February 2001), you make some interesting points regarding the many variables that attribute to CEO turnover. While the role of the chief executive is one of surmounting challenges and pressures, our research has found that CEOs are finding a reason to stay at the helm.

In a study titled, "On the Minds of CEOs," conducted by Burson-Marsteller and the marketing arm of Fortune, we found that only 2 percent of the CEOs surveyed said they "frequently" thought about quitting their job. Moreover, there's been some noteworthy conversation on our Web site's (CEOgo.com) discussion board relative to CEO turnover, suggesting today's climate for exiting CEOs seems "out of control."

CEOgo.com provides content on CEO trends, transitions, research, news, and carefully selected articles. Keeping the site current and interesting is our own challenge, but we appreciate the many insights provided through the features in CE.

Leslie Gaines-Ross

Chief Knowledge & Research Officer

Burson-Marsteller

New York, NY