Alan Greenspan came out with a book on Monday – The Age of Turbulence. Not a very good title, in our opinion. Still, it is sure to knock our own tome off the shelves. Everyone wants to know what the Maestro was really thinking.
According to Bob Woodward’s review in the Washington Post, the Fed chief liked Bill Clinton. He thought the man from Hope did a good job of holding down federal spending. By contrast, he has harsh words of criticism for the Republicans:
“My biggest frustration remained the president’s unwillingness to wield his veto against out-of-control spending,” Greenspan writes. “Not exercising the veto power became a hallmark of the Bush presidency… To my mind, Bush’s collaborate-don’t-confront approach was a major mistake.”
Greenspan seems to see the Republicans as we see them; that is, as wimpy, stupid, opportunists. They might as well be Democrats! He says they deserved to lose control of the House and Senate last year: “The Republicans in Congress lost their way,” Greenspan writes. “They swapped principle for power. They ended up with neither.”
Of Republican leaders J. Dennis Hastert and Tom DeLay, who resigned after being indicted for violating campaign finance laws, Greenspan notes:
“House Speaker Hastert and House majority leader Tom DeLay seemed readily inclined to loosen the federal purse strings any time it might help add a few more seats to the Republican majority…I don’t think the Democrats won. It was the Republicans who lost. The Democrats came to power in the Congress because they were the only party left standing.”
He goes on to criticise Vice President Dick Cheney, who once remarked that, “Reagan proved deficits don’t matter.”
Of course, “deficits DO matter,” says Greenspan.
We don’t know whether anything in Greenspan’s memoir will come as news. We doubt it will save Greenspan’s reputation from the reappraisal it deserves. Deficits do matter, and the former Fed chairman is probably responsible for more deficits than any human being that ever lived. His emergency-low-interest rates made the whole world deficit friendly.
Businesses ran deficits…and weakened their balance sheets. Greenspan blames Bush for the US government deficits…but it was the Fed that helped make deficits so easy to finance. Individuals, too, ran deficits in their household accounts. Now, those deficits have hardened into iron-cold debt…
Markets and Money