Greenspan Goes Public

The impact on the U.S. economy of Alan Greenspan, who was the Federal Reserve chairman for 18 years and the leading Republican economist for the past three decades, was best summed up by candidate Sen. John McCain (R-AZ) during his bid for the 2000 presidency.

When drilled by a reporter about what he would do if something happened to Greenspan, McCain responded, "Well, I'd put sunglasses on him and prop him up like that guy in Weekend at Bernies."

"Bernie" retired in 2006, however, leaving the economy and President Bush to go it alone. The party's over.

In Greenspan's new memoir, "The Age of Turbulence: Adventures in a New World," reviewed by Bob Woodward of the Washington Post, Greenspan praises president Bill Clinton's mind and tough anti-deficit policies, calling the president's 1993 economic plan "an act of political courage."

Not surprisingly for those of us aghast at the monstrous deficit accumulating under the current administration, The Decider doesn't get such rave reviews. Greenspan is frustrated that Bush didn't veto out-of-control spending by the Republican Congress who, Greenspan writes, "..swapped principle for power. They ended up with neither."

Greenspan strongly chastised both Dennis Hastert (R-IL) and Tom Delay (R-TX) because "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."

Even his friend and former colleague in the Ford administration, VP Cheney, was criticized for coining the GOP mantra.... "Reagan proved deficits don't matter." Greenspan rails that "deficits must matter" because uncontrolled government spending and borrowing can produce high inflation "and economic devastation."

Greenspan writes, "The hard truth was that Reagan had borrowed from Clinton, and Clinton was having to pay it back." During Clinton's second term, Clinton proposed devoting extra money to "save Social Security first. I played no role in finding the answer, but I had to admire the one Clinton and his policymakers came up with."

But, all of Clinton's gains were squandered, Greenspan writes, as the large, anticipated federal budget surpluses "were gone six to nine months after George W. Bush took office."

And, Greenspan curtly notes, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Observing the ruins of our economy today, Greenspan writes with some bitterness that Washington is "harboring a dysfunctional government... Governance has become dangerously dysfunctional."

And, of course, that is the trouble with a "Bernie" as chairman of the Federal Reserve. He didn't speak up when it mattered, and instead allowed himself to be used as a prop on the White House's macabre economic stage.