Now he tells us

September 15, 2007

Alan Greenspan has a few things he’d like to get off his chest.

Alan Greenspan, who served as Federal Reserve chairman for 18 years and was the leading Republican economist for the past three decades, levels unusually harsh criticism at President Bush and the Republican Party in his new book, arguing that Bush abandoned the central conservative principle of fiscal restraint.

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, which is being published Monday. […]

Greenspan accuses the Republicans who presided over the party’s majority in the House until last year of being too eager to tolerate excessive federal spending in exchange for political opportunity. The Republicans, he says, deserved to lose control of the Senate and House in last year’s elections. “The Republicans in Congress lost their way,” Greenspan writes. “They swapped principle for power. They ended up with neither.”

By all indications, Greenspan doesn’t hold back. He served under six presidents, and thought the least of George W. Bush. “Little value was placed on rigorous economic policy debate or the weighing of long-term consequences,” he wrote.

This is all very nice, of course, but I’m afraid it’s a little late in the game for Greenspan to start naming names.

Indeed, Greenspan is partially responsible for making Bush’s irresponsible fiscal policies a reality.

In 2001 testimony before Congress, Greenspan was widely interpreted to have endorsed Bush’s proposed tax cuts. In the book, he characterized his testimony as politically careless and said his words were misinterpreted.

Oh? Really? Greenspan learned long ago to be hyper-cautious with his word choices. His words weren’t “misinterpreted”; they were an endorsement of tax cuts the nation couldn’t afford. If he was concerned that people misunderstood his testimony as an endorsement, Greenspan could have spoken up and set the record straight. He didn’t.

Mark Kleiman remembers the truth.

Yes, this is the same Alan Greenspan who enabled Bush’s tax cuts with one of the most intellectually dishonest performances ever seen on Capitol Hill. (Yes, I know that’s saying a lot.) Greenspan, if you’ll recall, testified that the tax cuts were A Good Thing because otherwise there was the risk that the federal government would pay off all its debt and have to find a place to invest its spare money. That would then generate the further risk that the government, by owning equities, would wield undue influence over the economy. (No, dammit, I am not making this up!)

Even assuming arguendo that there was some real risk that the debt was going to be paid down to zero, and further assuming that for some reason taxes couldn’t be cut then, rather than now, Greenspan’s argument was hogwash. The government could buy some of the buildings it now leases. It could buy state debt. It could divide the surplus among the states on a per capita basis, replacing regressive state taxes. It could buy foreign sovereign debt. It could deposit money in banks (pro rata to their shares of private bank deposits) and let the banks do the lending. I still can’t imagine how Greenspan said it, or how the Senators on the Finance Committee listened to it, without giggling.

And now Greenspan wants to salvage his reputation? Improve his legacy? Too late.

As we have been discussing recently in these pages (e.g. the Larry Craig affair), the Republican party of today values loyalty above principle. Obviously that applies equally to Alan Greenspan.

  • Politics is not a bad profession. If you succeed there are many rewards; if you disgrace yourself you can always write a book. -Ronald Reagan (Source: The Quotable Politician)

  • Far too late for this guy who was a driving force behind unregulated capitalism protecting the wealthy and inherited elite at the expense of the middle class. I mis spoke, I was misinterpreted, I didn’t realize what I was saying, and now look at what you idiots have done. Greenspan knew exactly was he was saying and more the point…what he was ‘not’ saying. Rather than name calling and blaming his book perhaps should have been an apology for getting it wrong and not saying it right.

  • Interbubbular inhabitants pointing slippery, soapy fingers at the clueless inhabitants of other rainbow hued bubbles. Despicable, gutless toads.

  • This is just his “it’s not my fault” mea culpa. Quite frankly, we were all saying this while Bush was doing it. Nobody has ever slashed taxes for the ultra rich and then spent Federal money like a crazed weasel during a war except for Bush, and Alan endorsed it! So good luck with trying to re-write history because we all know Alan was one of the primary enablers of this suicidal fiscal policy we now enjoy.

    Follow the money – massive amounts of Federal bucks ended up in the pockets of Bush’s only real constituents – the ultra rich who bleed tax dollars from us all during times of war or flood and then want to “shrink the government down and drown it in a bathtub”. What we’re going through is nothing more than the biggest rip-off of middle class money to the ultra rich and Alan was behind much of it.

  • It is fairly interesting that Greenspan picked such an absurd argument to justify the taxcuts. He could have just gone with the standard “It’s good for the economy; taxcuts increase tax revenue” claptrap and have been done with it. I guess he had too much self-respect to go for that obviously bogus argument and instead preferred to acknowledge that tax revenues would go down, but to pretend that this is a good thing.

    And even as far as his argument goes, it makes no sense. Were it to have basis in reality, it would still make sense to cut taxes after we paid off the debt; not before. But again, he had his marching orders and did his best to find some way of making it happen. As for how anyone could listen to it without giggling, I’m thinking it was because their heads were too busy exploding from the whammy Greenspan had just laid on them. Besides, this was the Great Greenspan. Who could question him?

  • Hello. I consider myself a moderate liberal. I’m interested in seeing how this Greenspan book gets interpreted by the right wing. I was floored that Greenspan, someone I long admired, actually had some fairly good things to say about Bill Clinton, someone else I admire (for his leadership, not character). I have one question:

    If the big criticism here of Greenspan by conservatives is that he helped enable GW Bush by endorsing his tax cuts, and so therefore shares responsibility for Bush’s economic policies, then doesn’t that assume/imply that those tax cuts were bad?

    I thought conservatives believed that Bush’s tax cuts were good, not bad for the economy. What’s up?

  • How nice of The Great Greenspan to finally tell everyone that what we were yelling at him was right. Shorter Greenspan: Hey kids, you get to pay for my tax cut… SUCKAS!!!

    I’m pretty sure I know what the wingnut response will be: Greenspan is now senile. Nobody but a senile person could say anything good about the hated Clinton.

    I would also like to point out to any of the media morons who read this that Greenspan’s book now proves that the liberal economists (like Krugman) were RIGHT, and that in the future you might want to consider that when you go looking for “experts” and the usual “conservative” suspects offer their “expert advice”. You put them on TV to the detriment of us all, they have never been right, they only serve their political and economic goals, not ours.

    Who do you work for anyway?

  • Greenspin, the sack of desicated shit, was on 60 Minutes and said complimentary things about Billary, but then said he would still vote Republican in the next election.

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