No, I am not jealous. I don’t begrudge anyone for getting a job that pays somewhere in the neighborhood of a few million dollars a year, requires traveling around in a private jet, giving speeches, pressing corporate flesh and dining privately in first class facilities.
This is not a fantasy job description, but simply my interpretation of the one that former Fed Chairman Alan Greenspan took when he signed up with bond powerhouse PIMCO a few weeks ago.
I am sure that he will be working in some capacity with bond guru Bill Gross, who oversees billions of dollars of PIMCO’s bond funds. I have no problem with that as long as Mr. Greenspan doesn’t use his new position, along with his remaining clout as ex-Fed Chairman, to make statements in public that move world markets and produce a desired outcome for his new employer.
After all, making a public statement by a figurehead with his reputation about, say, a weakening global economy could have very positive effects on his employer’s bond holdings.
That’s the problem I have with this scenario. Twice this year, after leaving office, we have seen Mr. Greenspan make comments in public that were, at least in my view, unsuited for an ex-Chairman because of their market influencing effect.
While he has not done so since taking on his new job, I sure hope that he is aware of the potential conflict on interest, and acts with a sense of responsibility that one should expect.
That brings up an interesting question to ponder. Should those public officials, who were appointed to powerful positions, such as the Chairman of the Federal Reserve (and others), be required to have a “quiet period” after leaving office?
Contact Ulli
Comments 4
Hi Ulli,
I enjoy your daily articles and wisdom about the market.
I agree with you about the quiet period after leaving office. Greenspan should keep quiet indefinately!!!
Perhaps he gets an ego boost by watching the market fluctuate when he gives his unwelcomed advice.
About him working for Pimpco should prove interesting. Maybe there will be some rules against him making any comment now. Let’s hope so.
Carol G.
Greenspan should follow in Paul Volker’s footsteps and respect the new fed chairman, as chairman Volker respected him.
Ulli,
I couldnt agree more that the ex-Chairman of the Fed should have a certain period (several years?) before taking on a job whose outcome he can influence through his previous position.
Its just as bad for ex-Congressmen and ex-Senators who become lobbyists immediately upon leaving office, and then turn around and influence their former colleagues.
After all, we the taxpayers are paying for their very healthy retirement benefits!
So I propose the model used in industry. When a senior executive gets a severance package, their salary and benefits are paid only until he gets another job. As soon as he gets another position, the severance benefits stop….we should do this for our representatives…..
But of course it will never happen, as they pass the laws…but I can dream, can’t I?
Sanjoy
I also liked Carol G’s comment (slip of the keyboard?) that Greenspan should quit working for “Pimpco”…very appropriate!
Sanjoy