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Minyan Mailbag - Michael Santoli



Editors note: Minyan Michael Santoli, Barron's scribe extraordinaire and devout Yankee fan, shares his pain with ye faithful as we all digest the unthinkable: the Red Sox as world champs.

Your world view has ruptured.

The universe is not conforming to the rules of existence as you have come to understand them and explain them to yourself, and to anyone else who would pretend to listen. Your rightful glory is being forestalled, or denied, and you are determined to find out who, or what, is to blame. As if driving in reverse on Thunder Road, from a town full of winners you find yourself - to your horror - pulling back to here to lose.

All that you have remaining at your disposal is a talent for rhetorical bluster and a virtually limitless capacity to print and spend money. That money-minting ability is a formidable instrument of influence, but a blunt one. You have already printed and expended more than anyone has at any other time in history, and yet to less and less marginal effect per dollar spent.

But the expectation of perpetual success - without pause or setback - that you have created through years of posturing and jawboning and greedy acceptance of the credit due to others, requires that still more be spent to silence the growing chorus of doubters.

You are in your eighth decade of life, and the end is becoming visible on the dimming horizon. You must solidify the outsized legacy you have tried to create for yourself though self-aggrandizement and a habitual refusal to own up to failures. There is no alternative. More needs to be spent, and a crowning run of success has to ensue, within a year's time.

Your name, of course, is Alan Greenspan.

Or - wait - is it George Steinbrenner?

I'm on record as a self-loathing Yankee fan. The roots of fanhood reach deep into childhood, virtually unmovable and untransferable. So, rational or not (of course it's not) the last week has hurt.

But a sober assessment of reality means the Yankees' extraordinary wealth and obnoxious sense of their own virtue can't be escaped.

In the spring I described in print what I saw as Steinbrenner's "deepening King Lear mortality crisis, maudlin self-aggrandizement, militaristic delusions and outsized sense of entitlement."

The language would have to be tweaked and softened only slightly to describe Greenspan's hubristic management of the U.S. economy.

Greenspan's arrogant profligacy comes in the form of a policy of negative real interest rates and a habit of putting his own happy spin on economic reality. He has punished risk aversion, taxed personal financial prudence and rewarded recklessness. With the creation of a debt bubble his only direct tool, he's allowed the country to get in hock with the rest of the world.

As for Steinbrenner, his unmatched financial resources and urgency to throw them around have bloated his team payroll to $190 million, and climbing. In baseball's own smaller version of the "Greenspan put," Steinbrenner is the assumed irrational bidder of last resort for every aging free agent coming off a good year, and every other owner looking to dump white elephants.

What's important, though, are the distortions that these men have introduced to their respective games.

Greenspan's folly derives from a refusal to allow the business cycle to do its thing. Purgative, restorative recessions are not tolerated. He has convinced himself and the world that they are unnecessary, that he has perfected the monetary arts and need not concede the rhythms of society and the verities of human nature, as observed from civilization's dawn.

In a way, it's hard to blame him, given his mandate, political debts and the incentive structure of his job.

Similarly, there are no "rebuilding years" in the Bronx. The old baseball pattern of contending for a while with a group of players, and then grooming a younger generation for future success, is alien to him. He has seeded the rosters of his adversaries with the most promising up-and-comers once part of his organization. The rules that apply to other teams - and other countries - are said not to apply to the Yankees or the U.S.

Again, he's merely exploiting a system he didn't create, but to society's long-term detriment.

Under these policies, Alan and George have left themselves no room for error and no choice but to throw more money at their problems.

Greenspan needs for everything to break right - for consumers to keep spending above their means, for companies to then begin spending heavily, for the government to pursue reckless stimulus programs, for oil prices to somehow come down, for purported productivity gains to accelerate - in order to avoid the economy becoming the equivalent of a debt-engorged Red Giant, slowly dissipating its once-formidable energy.

Steinbrenner, too, has used ever more money to cover a lack of intellectual creativity and to avoid sacrifice and hard choices. Now - with an expense nut that requires the continued attraction of 3 million fans a year, nourished by the team's abrasive Cult of Winning at all Costs - Steinbrenner has no alternative but to write more and bigger checks.

In both cases, of course, this can only delay the obligatory pain for so long. Old men with hungry egos, spending other people's money, are no formula for long-term success.

As a fan of the team and the country, let's hope I'm wrong and these are just the pained delusions born of a still-fresh October collapse.

Minyan Michael Santoli


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