Now He Tells Us
Why is Alan Greenspan just now getting around to criticizing the Bush Administration?
September 20, 2007
Alan Greenspan — the former U.S. Federal Reserve Chairman — has made an illustrious career out of casting himself as the humble public servant par excellence in the United States.
Sadly, the entire world now stands to realize what some have long known — that Mr. Greenspan, far from being wedded to principle, has always been twisting in the political winds.
The world of central bankers is known for its reserve — and a distinct effort to shy away from the limelight.
So when Mervyn King, the current head of the Bank of England, opined on the front page of the Financial Times that he was happy that his predecessor, Eddie George, had really retired (and stayed quiet), it was a rare — but well-deserved — moment of public criticism of Alan Greenspan.
Apparently, his $8.5 million book contract for writing “The Age of Turbulence: Adventures in a New World” is not enough. Mr. Greenspan, at the stately age of 81 years, has been hawking his wares to high bidders to speak at conferences and client get-togethers.
In addition, he has rented out his services to Germany’s Deutsche Bank. Supposedly, he did so because he had always enjoyed working with Peter Garber, now the bank’s U.S. chief economist, while the latter worked on the Fed staff in decades past.
Now, to be sure, in a free-market economy, everybody has the right to rent out his services. And yet, England’s Mervyn King has a point.
Just think of poor Ben Bernanke. He constantly has to operate in the shadow of that veritable über-Vater otherwise known as Alan G. Had Mr. Greenspan not constantly sought to cast himself as the impersonification of the humble public servant, it would have been a different matter.
But first making a career out of operating like a sphinx – and then cashing in on more clairvoyant statements in private for pay – well, that simply stinks.
Unfortunately for Mr. Greenspan, it gets worse. The whole world of central banking — as well as of global diplomacy — is aghast at Mr. Greenspan’s confession in his book that he played a prominent role in the toppling of Iraq’s Saddam Hussein because it was better for the global oil markets.
Needless to say that Republicans are aghast that this stalwart of American principles now puts himself in a position to become the crown witness of the conspiratorial minds who were always certain that the president from Texas invaded Iraq primarily because “that’s where the oil is,” to paraphrase the bank robber Willie Sutton.
One would have expected such a headline about Mr. Greenspan’s far-ranging mind in, say, the satirical U.S. newspaper The Onion, or in France’s Canard Enchainé — but surely not on the front pages of major newspapers.
As if that weren’t enough, Mr. Greenspan stayed closer to his real turf by “coin-fessing” in his book that he thought Mr. Bush’s fiscal policies were a catastrophe for the nation.
That, indeed, is a very important judgment — but unfortunately not one that the former Fed Chairman rendered out loud, or acted upon, while he was in his powerful office (and could have done something about it).
Hearing about it now smacks of a gross violation of that age-old rule presented to attendants at weddings. They are asked to step forward and raise their objections to the two people getting married — or “forever hold their peace.”
No such luck with Mr. Greenspan. If one reexamines the record of the critical period, one will find plenty of statements in Congressional testimony and otherwise where Mr. Greenspan effectively had it both ways, often within the time span of a single day.
Unlike Mr. Kerry, the unfortunate presidential candidate, Mr. Greenspan — pardon, the Sphinx — was always for it, before he was against it.
Now, in his defense, he can always argue that fiscal policy is not exactly the remit of central bankers who are supposed to stay much closer to the knitting of monetary policy and interest rates.
But clearly, the two spheres of policy are closely related — and, in an era where most politicians have an extremely weak record on fiscal consolidation, many a central banker has stepped forward and played the vital role of the disciplinarian and party pooper, reminding folks that there are distinct limits to public deficits.
Not so Mr. Greenspan. You see, quite apart from being the world’s top central banker, what he always really desired was to be loved – and preferably by everybody, at least in turn.
As he confesses in his book, he really liked Bill Clinton and Bob Rubin, his Treasury Secretary. But when Mr. Bush was elected, Mr. Greenspan showed an initially uncomfortable but still Blairite concept of making the new man a good friend.
Only he now outdoes even Mr. Blair’s constant pivots in order to remain popular. With the Democrats once again slated to take over political power in the United States, and quite likely even occupy the White House again, the time has come for Mr. Greenspan to rotate back to the Democratic camp.
That will surely make him popular with that party, but who gets screwed in the meantime is the American people whom Mr. Greenspan implicitly always confesses to serve so ardently — and full of principle.
When they needed his toughness, whether to rein in mountains of debt piling up, or reining in a mortgage market gone berserk, Mr. Greenspan was always reliably there — to pump out more liquidity, be more lenient, whatever was the fashionable thing to do to keep the party going.
In the end, two things are really astounding. For all the major differences in their character, there are amazing parallels between the gregarious Mr. Clinton and the dour Mr. Greenspan.
Aside from one playing the saxophone and the other the clarinet, at heart they are both “GAGA men” — so desperate for affirmation that they will always “Go Along, Get Along” kind of guys.
The equally disturbing finding is that Mr. Greenspan takes a page out of the self-ingratiating playbook of another famous scribe — and very self-important man, Bob Woodward.
The latter still masquerades as a journalist, while he ardently keeps all the good stuff for the books he tends to write years after when he should have gone public with his insights in order to serve the public which he, too, so ardently claims to serve.
Just don’t you believe it. The apparent new operating motto is: Hold your peace while in government — to write tell-all books about your heroism, wisdom and insight later.
Americans deserve better than book-deal hucksters. They need those pros to step up to the plate when it matters, not years after.