A ride with a view: Greenspan can see the evidence of rising prices from limo window
Tuesday, May 16th 2000, 12:00 am
By: News On 6
WASHINGTON - Alan Greenspan lives in an increasingly pricey world.
Fast-paced housing, food and auto sales are making the Washington economy sizzle.
And if the Federal Reserve chairman notices, he may see his surroundings as evidence that the central bank should slow the economy and raise interest rates when policy-makers meet Tuesday.
Of course, outside analysts are certain that Mr. Greenspan prepped for Tuesday's meeting by poring over mountains of economic data from around the nation, not just Washington.
A Fed report on Monday showed industrial production surged a strong 0.9 percent in April.
But signs of a boom are not far from the Fed's doorstep, either.
Once known for having a staid economy supported by a stable federal payroll, the nation's capital now moves to the faster beat of the new technology-based economy.
Although whole sections of the city remain mired in abject poverty, restaurant sales outpace those of grocery stores. Mercedes, BMW and Lexus sales boom.
And developers such as Ritz Carlton Co. are building $1 million condominiums.
"If I were Greenspan, I would say this looks pretty hot," said Stephen Fuller, an economist at George Mason University.
The most recent reports suggest that too-hot growth will spur the inflation-fighting Fed to raise short-term interest rates a half-percentage point on Tuesday.
In April, the U.S. unemployment rate sank to a three-decade low of 3.9 percent.
A tight labor market contributes to the anecdotal evidence around Mr. Greenspan that the economy is sizzling - and that inflation may be the outcome.
The Fed chief's $141,300 annual salary affords him hardback books, well-tailored gray suits and membership at a country club where he golfs and plays tennis.
Still, his wages pale compared with those of the dozen or so locals who have become high-tech billionaires.
The Fed chairman does not have to worry about buying a car. He is driven to work in a government-owned Lincoln Grand Marquis.
If he looks out the window, he can see the "help-wanted" signs at fast-food outlets and construction sites.
The city's jobless rate is just 2.2 percent.
Washington's 400,000 workers in the technology sector now outnumber the 330,000 employees on the federal government's payroll.
Mr. Greenspan's limo ride might take him to the Kennedy Center, where symphony tickets go for about $70 and a seat at the opera is more than $100.The Fed chief reads plenty of newspapers, so he's probably noticed that homes in Washington seldom sell for the asking price as multiple buyers bid up the sale.
He lives in the city's Northwest section, one of the capital's premier neighborhoods and a place where detached homes sell for $500,000 to $1 million or more.
If he drops in at the Watergate Florist, a dozen roses for his wife, NBC correspondent Andrea Mitchell, will be $60.
And if the limo needs a fill-up, the Exxon station across the street is selling regular for $1.69 a gallon - lingering evidence of the crude oil shortage that sent gas prices up 50 percent over the last year.
But Mr. Greenspan will have to get out and pump. It's all self-serve.
Has Mr. Fuller seen this before?
Yes. The last time the Washington economy was so hot was right before the 1990 recession.