After four decades of Alan Greenspan’s nimble maneuvers, it seemed no accident that his long-awaited memoir’s publication ("The Age of Turbulence") coincided with global financial turmoil. Instead of examining his frequently suspect management of monetary affairs during 18 years as chairman of the Federal Reserve Board, the political and financial worlds last week focused on Greenspan’s self-portrait as a "conservative libertarian" who deplores Republican leaders and their policies.
Greenspan knows that the surest route to praise in Washington is for a purported man of the right to be seen embracing the left. Although appointed by Republican presidents to four of his five terms heading the nation’s central bank, Greenspan in his memoir is markedly more negative about those political benefactors than reviewers have suggested. Only Gerald Ford, the hapless, short-term appointed president, gets passing grades.
But the "Maestro" sounds false notes in a book probably revealing more than intended. Instead of a detached policymaker, Greenspan comes over as engaged in political games. I have had enough contact with Greenspan to know the central banker in private is a political junkie, but I had no idea how deeply he was involved with the one Democratic president who appointed him: Bill Clinton.
One veteran Greenspan-watcher, going first to the book’s picture section, was surprised that he had selected a photo of himself — between Hillary Clinton and Tipper Gore — in the place of honor for President Clinton’s 1993 deficit reduction speech to a joint session of Congress. Federal Reserve colleagues viewed taking that seat as undermining the central bank’s cherished independence. Greenspan’s memoir does not mention Clinton’s quest for him to cut interest rates in compensation for tax increases, but the Fed chairman was quite concerned at the time about being seen as the president’s pawn. When my column then suggested his presence in the presidential box played into Clinton’s designs, he called me (for the last time) to complain.
In "The Age of Turbulence," Greenspan buys into the discredited depiction of Ronald Reagan (who first named Greenspan to the Fed) as an amiable dunce and does not conceal contempt for both Bushes (each of whom nominated him). Even more surprising is his adoration of Clinton. While scathing in attacking increased spending by George W. Bush, he ignores massive non-defense spending hikes under Clinton and embraces the Democrat’s tax increase "as our best chance in 40 years to get stable long-term growth."
Greenspan’s book ignores Reagan’s tax-cutting supply-side movement as if it never happened. Seeing no inherent benefits from a lower tax burden, he accepts the Democratic deficit-reduction formula that a dollar of higher taxes is equivalent to a dollar of reduced spending.
With the memoir retreating from his passive endorsement of George W. Bush’s 2001 tax cuts, it is hard to tell the Greenspan of this book from a conventional Democrat. He depicts his favorite colleague in the younger Bush’s administration as the dysfunctional Treasury Secretary Paul O’Neill, who opposed tax-cut strategy while ruining morale in his department.
The tip-off to Greenspan’s mindset is his reference to Democratic Sen. Kent Conrad as a "fiscal conservative." Avowed deficit hawk Conrad’s advocacy of high taxes and high spending gave him a 16 percent rating last year from the National Taxpayers Union.
Though Greenspan’s memoir makes him a virtual Clinton administration member, he describes himself as a reluctant public servant — which runs counter to my firsthand observations. He writes that he turned down a job in the Nixon administration but in fact was rejected by the new president’s staff because of his 1968 campaign performance.
(Temporarily exiled to political Siberia, a distraught Greenspan was reduced to scheduling breakfast with me on his visits from New York to Washington.) His book shows him reluctantly accepting Reagan’s appointment as Fed chairman in 1987, but in fact he aggressively promoted himself for the job. (He approached me at a Washington reception that year to say he had heard I opposed his appointment, and asked me why.)
"The Age of Turbulence" lacks the confessional candor of the best memoirs, but it tells enough to leave intriguing questions for a future biographer. Why did three Republican presidents name a Federal Reserve chairman fundamentally opposed to the GOP’s economic doctrine? Did Greenspan deceive them?