I have been edging around this conclusion since watching Alan Greenspan trying to steer interest rates in a manner that would make an amateur canoist blush: straight up, straight down, straight up, etc.

As I mentioned to our friends in New York this week, I’ve become convinced that both the metrics, and the maneuvers for control, are ineffective and outdated. Should GDP really rise with the price of oil, even though it acts like a tax againts all of our goods and services? Should unemployment be taken as gospel, when the figure itself is provably inaccurate (not counting those who have stopped looking), and when it has no indication of the huge tradeoff of McJobs for better-paying jobs?

When the Fed raises rates, today, the banks do the opposite with mortgage rates: for the last couple of months, the latter have declined even as the former rose or stayed fixed.


And here is the strangest thing: I have mentioned this idea to the participants of our New York Dinner (these are C-level execs in the industry, generally, and VCs and top business reporters), as well as to other friends at places like Merrill Lynch, Blackstone, etc.

No argument. That worries me almost more than the original idea.