Greenspan Comments on Current and Former Presidents

Alan Greenspan, who led the American Federal Reserve Bank (FRB) for 18 years, bashed President George W. Bush and the Republicans while lauding former President Bill Clinton in his new book.

A lifetime Republican, former Chairman Greenspan wielded a powerful arm in not only the American, but also the world economy, whereby people referred to him as the de facto "Economic President."

According to the September 15 reports of the New York Times and the Wall Street Journal, Greenspan’s memoir is scheduled for release on September 17 and is titled “The Age of Turbulence: Adventures in a New World.” The book strongly criticizes President Bush and the Republicans for forsaking the fundamental principles of conservatism, such as a balanced budget and small government, in order to achieve political objectives.

Greenspan writes in his memoir that he advised President Bush to veto against an out-of-control spending bill, only to be ignored by the president. The temporarily balanced U.S. budget turned into a catastrophic deficit from thereon.

Former Chairman Greenspan assessed that “[The Republicans] swapped principle for power. They ended up with neither. They deserved to lose (the 2006 election).”

Nevertheless, he added a compliment to the administration for its efforts to maintain the FRB’s independence.

All in all, Greenspan assessed that President Bush was concerned with “achieving electoral commitments and following ideology, while being unconcerned about economic policy and its influence."

He recollected that when Vice President Dick Cheney was elected in 2000, he saw an opportunity to promote a tight fiscal policy and the ideals of a liberal market economy, on which he was proven wrong.

On the other hand, Greenspan reserves his highest praise for Bill Clinton, described as “a sponge for economic data, who maintained a consistent, disciplined focus on long-term economic growth.”

He recalls, “I warned President Clinton upon his inauguration that there was a financial crisis danger if budget deficits are not curtailed. President Clinton heeded the warning and undertook a decisively curtailed budget, achieving a big fiscal surplus.” On the Monica Lewinsky scandal issue, he writes, “It was very disappointing and saddening.”

Greenspan answers his critics who say, “having maintained a low interest rate for such a long period of time caused real estate price soaring,” by attributing it to the collapse of communism. The collapse of communism inserted tens of millions of new labor power into the world market, causing a fall of wage and prices, which in turn yielded low interest rates.

He also provides assessments of other former presidents. Greenspan assesses, “Jerry Ford was as close to normal as you get in a president.” He also confesses that “Jimmy Carter had no use for me—we met on only a couple of occasions and never hit it off.” About Ronald Reagan, he writes, “What attracted me to Reagan was the clarity of his conservatism.”

The publisher reportedly bid $8 million for Greenspan’s memoir.

The White House answered to Greenspan’s allegations of a "lax fiscal policy" by stating, “We do not regret the spending we allocated to fight terrorism and to make America a safer place.”

kong@donga.com