In “The Age of Turbulence: Adventures in a New World,” published by Penguin Press, Mr. Greenspan criticizes both congressional Republicans and President George W. Bush for abandoning fiscal discipline.

I happen to agree.

more at memeorandum

4 Responses to “Republicans in Congress he writes, “swapped principle for power. They ended up with neither. They deserved to lose.””

1. San Francisco Liberal
   September 16, 2007 - 09:45 PM on September 16th, 2007

   And Greenspan went on to…”criticized President George W. Bush and congressional Republicans for abandoning fiscal discipline and for putting politics ahead of sound economics.”

   and…”Little value was placed on rigorous economic policy debate or the weighing of long-term consequences”

   oh, and…”The former Fed chair said he urged Bush to veto a string of “out-of-control” spending bills, but to no avail. He was told the president wanted to avoid antagonizing Republican political leadership.”

   http://uk.reuters.com/article/businessNews/idUKN1524203420070915?pageNumber=2

2. San Francisco Liberal
   September 16, 2007 - 09:48 PM on September 16th, 2007

   “While condemning Democrats, too, for rampant federal spending, he offers Bill Clinton an exemption. The former president emerges as the political hero of “The Age of Turbulence: Adventures in a New World,” Greenspan’s 531-page memoir.”

   ————

   That’s great.

   The man loves Bill Clinon.

   he “praises Clinton’s mind and his tough anti-deficit policies”

   ———–

   As for Bush?

   “…he expresses deep disappointment with Bush.”

   

3. Peejz
   September 16, 2007 - 10:41 PM on September 16th, 2007

   His book is half memoir and half treatise on the state of the world and its future. While much of the ground has been covered either in his own previous public remarks or in other books, Mr. Greenspan sheds new light on many policy decisions, offers often-trenchant observations of the presidents he has known and makes some surprising economic forecasts, unmuffled by the often opaque and complex phraseology he used as Fed chairman. Critics, however, may seize on his continued defense of decisions they say led to first a stock bubble and then a housing bubble, and on some assertions that differ from the historical record.

   He devotes chapters to each of the major economic challenges facing the U.S. and the world. On energy, he recommends more use of nuclear power, and he predicts efforts to reduce global warming with carbon caps or taxes will fail. Rising income inequality could undo “the cultural ties that bind our society” and even lead to “large-scale violence.” The remedy, he says, is not higher taxes on the rich but improved education, which can be helped by paying math teachers more.

   Mr. Greenspan returns repeatedly to the far-reaching importance of communism’s collapse. He says it discredited central planning throughout the world and inspired China and later India to throw off socialist policies.

   In coming years, as the globalization process winds down, he predicts inflation will become harder to contain. Recent increases in the price of imports from China and a rise in long-term interest rates suggest “the turn may be upon us sooner rather than later.”

   Left alone, he said, the Fed’s policy-making body, the Federal Open Market Committee, can keep inflation between 1% and 2%, but that could require forcing interest rates to double-digits, a level “not seen since the days of Paul Volcker,” his predecessor as Fed chairman. “I fear that my successors on the FOMC, as they strive to maintain price stability in the coming quarter century, will run into populist resistance from Congress, if not from the White House,” he writes.

   If the Fed succumbs to that pressure, inflation could rise from a little over 2% at present to an average of 4% to 5% by the year 2030, he writes. Ten-year Treasury yields, now below 5%, will rise to “at least 8%” with the potential to go “significantly higher for brief periods.” This, he says, will lead to stagnant returns on stocks and bonds and much smaller gains in housing prices.

   Mr. Greenspan won plaudits for achieving low inflation and unemployment with just two mild recessions during his tenure at the Fed. But more recently his record has taken some knocks. Some critics fault him for not doing more to restrain the stock bubble of the 1990s, and for responding to its eventual bursting with such low interest rates that housing prices subsequently soared.

   Mr. Greenspan writes that in early 1997, he told his colleagues the Fed should raise interest rates as a “preemptive” move against a stock-market bubble. But transcripts of Fed meetings from that period do not support his book’s version of events: They show Mr. Greenspan argued for a rate increase principally because of inflation.

   He describes Bill Clinton as “a fellow information hound” with “a consistent, disciplined focus on long-term economic growth” whose relationship with Monica Lewinsky “made me feel disappointed and sad.”

4. Robert
   September 17, 2007 - 01:42 AM on September 17th, 2007

   “Left alone, he said, the Fed’s policy-making body, the Federal Open Market Committee, can keep inflation between 1% and 2%, but that could require forcing interest rates to double-digits, a level “not seen since the days of Paul Volcker,”his predecessor as Fed chairman. “I fear that my successors on the FOMC, as they strive to maintain price stability in the coming quarter century, will run into populist resistance from Congress, if not from the White House,”he writes.

   If the Fed succumbs to that pressure, inflation could rise from a little over 2% at present to an average of 4% to 5% by the year 2030, he writes. Ten-year Treasury yields, now below 5%, will rise to “at least 8%”with the potential to go “significantly higher for brief periods.”This, he says, will lead to stagnant returns on stocks and bonds and much smaller gains in housing prices.”

   The problem I see with this analysis is it completely ignores fundamental causes of inflation that are completely outside the Feds control. Like oil prices. Sure the Fed can raise interest rates until it puts the economy into recession, then hope oil demand slackens, but with demand for oil surging wo0rldwide that is going to be less and less effective, plus a crappy way to do it.

   So as long as asswipe Enviros and Democrites keep us from energy independence, I see Greenspan’s analysis as flawed.

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