Alan Greenspan Loves the Spotlight

Alan Shrugs?

Sure, and he seems to be causing quite a dustup as he gears up to promote his book, The Age of Turbulence: Adventures in a New World. The maestro, whose legacy seems to be tarnishing at the edges, is taking a few potshots of his own in order to stir up some interest.

Of course the $8 million advance he received should ease some of the pain he has felt as the subprime blame game starts up in earnest. He will explain himself on CBS's 60 Minutes Sunday night, and CNBC's Maria Bartiromo snagged him for an interview early next week. It should be interesting to hear his unvarnished comments, although if it is typical "Greenspeak" you will need a translator. Speaking of translator, Fed watcher Greg Ip filed this report late yesterday...

Mr. Greenspan, who calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose."

Many economists say the Fed, by cutting short-term interest rates to 1% in mid-2003 and keeping them there for a year, helped foster a housing bubble that is now bursting. In his book, which was largely written before much of the recent turmoil in credit markets, Mr. Greenspan defends the policy. "We wanted to shut down the possibility of corrosive deflation," he writes. "We were willing to chance that by cutting rates we might foster a bubble, an inflationary boom of some sort, which we would subsequently have to address....It was a decision done right." Wall Street Journal

Alan's legacy might not turn out to be on par with Paul Volcker's. And if Ben Bernanke does not lower the fed funds rate next week, he might start drawing favorable comparison's to Volcker. Is Ben a hardass? Tough love is one thing. No love is another.

Greenspan Book Criticizes Bush And Republicans
WSJ

Greenspan on Housing Market/ Excerpt Video

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