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September 15, 2007


John Cassidy

Dear Brad,

A colleague pointed me to your misleading and intemperate posting about my article in the October issue of Portfolio.

With respect, Paul Krugman has nothing to with this. In June 2002, the Commerce Department announced that its final estimate of GDP growth for the first quarter was 5.6 per cent. To be sure, the GDP figures have since been revised down, but Greenspan was reacting to contemporary data. In addition, the revised figures still show growth of 2.7 percent and 2.4 percent in the first two quarters of 2002. Given the widespread fears of a recession after 9/11, it seems to me, and it seemed to others at the time, that the 2002 recovery was, indeed, an amazingly robust one.

As to how to interpret Greenspan's public comments about the likelihood of a recession, which spooked the markets at the beginning of this year, that is a matter of opinion, and you are as entitled to yours as I am to mine. I would just put to you one question: Can anybody imagine Paul Volcker putting himself in the same situation?

Brad, you are forever berating economic journalists. Some of that is healthy: we all make mistakes. But somebody who sets himself up as a professional arbiter needs to have high standards. In this instance, the quality of your research was unworthy of a wire service rookie, let alone a tenured professor at a prestigious university.


John Cassidy

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