Here's one thing you haven't read about Alan Greenspan's book: It confirms the death of microeconomics.

That's obviously a bit too strong. As Steven Levitt and his blockbuster book Freakonomics and Tyler Cowen and his recently published and wonderful-to-read Discover Your Inner Economist have shown, there still is some role for microeconomic analysis when thinking about individual behavior, especially if the goal is to entertain and sell books.

But the second half of Greenspan's book, the part that, as CNBC's chief economics correspondent Steve Liesman first reported on the day the book was released, will have a far greater impact, seems to put to bed the notion that government policy is based on microeconomics. Macro appears to be, and over the past 40 years have been, much more important.

(Note to my alma mater, the Goldman School of Public Policy (GSPP) at the University of California, Berkely, with which I have had a three-decade long fight about this: I told you so.)

Micro seemed preeminent in the 1960s when Kennedy administration economists thought they could fine tune the economy by making minor adjustments that would affect individual behavior. This was also the era of the micro-oriented planning, program, and budgeting system and other similar initiatives in the federal government and when the field of public policy first began to think of itself as a discipline. I was told on my first day at GSPP in the mid 1970s that we would be taught "policy analysis" and most of my courses were micro-related. There were no macro courses. Indeed, the notion that macro was important was thought to be laughable.

Four things seemed to have happened to change the value of microeconomics to policymakers. 

1. The tweaking by Kennedy era economists didn't work. The information they had was too imperfect, the situations they were dealing with too "chaotic," and human behavior changed faster than the policies could be created and implemented.
2. Globalization made mass movements more important to policymakers than changes in indivdual behavior.
3. Conservatism overtook liberalism in the United States as a political philosophy. That meant that individual behavior was considered more the responsibility of the individual than of the government and rendered microeconomics and microeconomists less important.
4. As partisanship became more important to elected officials, almost every microeconomic study saying one thing was countered by a microeconomic study saying just the opposite. The absolute truth micro economists in the 1960s said could be found has been replaced with findings that are downplayed almost immediately.

Realizing that microeconomic analysis plays a far smaller role today than it did in the past is important in the following sense: any argument and rationale for a particular policy change -- tax, spending, regulation, whatever -- that is made with a microeconomic rationale has to be treated skeptically. They may be true, but because policymakers seem to be far more turned on by macropolicy considerations, they may also be largely beside the point and more rhetoric and spin than anything else.