StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

Is Greenspan Asking For Understanding and Forgiveness Or Just Trying To Sell Books?

15 Sep 2007
Posted by Stan Collender

In a front page story in today's Washington Post about Alan Greenspan's about-to-be-published book, "The Age of Turbulence: Adventures in a New World," Bob Woodward says that Greenspan lashes out at George W. Bush, the Bush administration, and congressional Republicans for terrible economic stewardship.


According to the Post story, Greenspan expresses real anger about Bush continuing to cut taxes even though the budget outlook and economy no longer justified it. He also puts some real distance between himself and the administration and its Republican congressional allies by saying that he is a "libertarian Republican" while saying the others abandoned the principles of the Republican Party to enhance their power. The clar imnplication is that he does not believe Bush and congressional Republicans deserve to be called conservatives.


All interesting stuff that will get the type of coverage Greenspan needs to ring up lots of sales. It virtually guarantees that the book will be bought by political and economic junkies alike and will be seen by riders n the mass transit systems heading to and from Wall Street and Capital Hill for weeks to come. Expect it to be Sunday talk show fodder, radio talk show rants, Daily Show and Colbert Report features, and late night television show jokes for some time.


What's not clear from Woodward's account of the book is whether Greenspan takes any responsibility for the mess he's complaining about.


As the most-respected voice in economic policy making at the time, Greenspan absolutely had the opportunity and ability to stop the fiscal excesses of the Bush administration.


But he didn't.


He alone could have stopped the speeding trains of the Bush tax cuts. Instead, in 2001 his congressional testimony put the first tax cut into hyperdrive. His silence about the propriety of the additional cuts helped make them into the reality he now says was a mistake.


Greenspan, who in his book apparently complains about Bush's failure to veto legislation that increased spending, was in the perfect position to make it clear both publicly and privately to the White House that real harm was being done. But he was silent.


If the Post account is accurate that Greenspan was unhappy about the Republican Party adopting the mantra "Deficits Don't Count," Greenspan bears a great deal of responsibility for not criticizing that when it could have made a difference.


And, finally, Greenspan should realize that the government he describes as dysfunctional was that way in part because one of its most important economic poicymakers -- the chairman of the Federal Reserve -- refused to use his power, prestige, and credibility to stop it from happening.


The book won't be available until Monday, and it's hard to see from the Post story whether Greenspan is taking any real responsibility for the budget and economic mess he left.


But what's clear from the story is that, whether he accepts responsibility or not, Greenspan clearly deserves some of the blame.


This Just In...Brad Delong has some excellent analysis and comments about Greenspan that are definitely worth looking at. 

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