“WAR IS GOD’S WAY of teaching Americans geography,” Ambrose Bierce, the eccentric author of “The Devil’s Dictionary,” told a Carnegie Hall audience one year before America entered WWI. He might have added economics to the disciplines about which we learn something from wars. One lesson we have already learned is that even the best monetary policy gurus find themselves groping for direction when the fog of war descends upon them. The Federal Reserve Board’s monetary policy committee, until now able to reach decisions even when faced with contradictory economic signals, says it can’t decide whether the economy was recovering when the war broke out, or was in deep trouble and in need of a further cut in interest rates. So the members have thrown up their hands and decided to do nothing, which suits Chairman Alan Greenspan, who is believed to be sufficiently optimistic to feel no rate cut is needed.

This is making president Bush decidedly cross. He wants to see interest rates come down in order to pep up the economy. According to one knowledgeable source, “The White House is now of the view that ‘the bottom fell out’ of the U.S. economy in February.”