[FOUNTAIN]The value of ‘constructive ambiguity’

Since he was named chairman of the U.S. Federal Reserve Board in 1987, Alan Greenspan has been one of the dominant figures in the world economy. In his public career, his trademark has been “ambiguity.” In June 1995, when the world was focusing on whether the U.S. economy would improve or retreat, Mr. Greenspan spoke at a banking conference in Seattle. After the conference, the New York Times ran a headline, “Greenspan Sees Chance of Recession.” But the Washington Post interpreted the speech differently and wrote, “Recession Is Unlikely, Greenspan Concludes.” Mr. Greenspan laughed at the discrepancy and called his attitude “constructive ambiguity.”
His style of speech is ambiguous in his personal life as well. He dated NBC journalist Andrea Mitchell from 1984 until they got married in 1997. In Bob Woodward’s biography, “Maestro,” Mr. Greenspan confided to his friend that he had already proposed to his girlfriend twice, but that Ms. Mitchell, who is 20 years younger than he, had not gotten it. At Christmas, he asked Ms. Mitchell whether she wanted an extravagant or a simple wedding. She finally understood that he was asking her to marry him, and she accepted.
There is a reason for his ambiguity: He wants to prevent his remarks on the economic situation or interest rates from influencing the market. If the market began to respond to each of his words, actual prescriptions would lose their effect. Instead, he is considered preemptive and smart when making actual policy decisions. When he drastically lowered interest rates in early 2001 and immediately following the Sept. 11 terror attacks, even the market was surprised.
But Korean financial authorities are straight talkers. Last year, Bank of Korea Governor Park Seung was criticized when his words on the economy and interest rates were not followed by actual policies. Recently, an official at the Ministry of Finance and Economy said the central bank could use its power to issue more banknotes to defend the foreign exchange rate. But the government often misses the opportunity to implement policies and actions, despite blunt, shocking comments. It might be too much to expect our financial authorities to show the prudence of Mr. Greenspan, but they at least should not invite ridicule as the wheel on the cart that always creaks most.

by Lee Se-jung

The writer is a deputy business news editor of the JoongAng Ilbo.