THE AGE OF TURBULENCE: ADVENTURES IN A NEW WORLD
By Alan Greenspan
The Penguin Press, 531 pages, $35
“Garbo talks.” That was the advertising slogan for Greta Garbo’s first talking picture, Anna Christie. A similar advertising campaign would have been appropriate for the famously cryptic economist who developed the dropped hint into a high art during his long service as chairman of the Federal Reserve, from his appointment by President Reagan in 1987 to his retirement in 2006. In The Age of Turbulence, Greenspan speaks—and speaks and speaks and speaks, for more than 500 pages, destroying his reputation for laconic concision.
Even before the book hit the stores, snippets were fueling media controversies. Bloggers and pundits seized on Mr. Greenspan’s passing remark that he is “saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil”—as though it were not evident that America’s Persian Gulf policy has been in large part about oil since the era of Franklin Roosevelt. Other commentators blamed Mr. Greenspan for not manipulating interest rates to avert the stock and housing bubbles. Many of the same critics on the left, one suspects, would have been the first to denounce Mr. Greenspan as the class enemy of the horny-handed sons of toil, had he sought to lance the bubbles by jacking up interest rates as they now claim he should have done.
It’s hard to square the Alan Greenspan of blogosphere demonology—the one who conspired with Bush to invade Iraq and single-handedly created the stock and housing bubbles—with the thoughtful, modest, well-informed and thoroughly likable author of The Age of Turbulence. One reason the book is so long is that much of it is devoted to Mr. Greenspan’s thoughts about the evolution of the global economy in the decades ahead. Chapters include “The Choices That Await China,” “The Tigers and the Elephant” (the elephant being India), “Russia’s Sharp Elbows” and “Latin America and Populism.” Mr. Greenspan’s free-market preferences do not prevent him from realizing that different nations have different economic models; he has a chapter titled “The Modes of Capitalism.” His sensitivity to national differences in economic culture is a refreshing antidote to the simplicities of Thomas Friedman. It’s a pity that this part of the book has received almost no attention.
The tour d’horizon of the global economic landscape notwithstanding, The Age of Turbulence is first and foremost a memoir by a public servant who excelled at politics, with the requisite minor revelations about the Clinton and Bush administrations. Inevitably, headlines have been generated by Mr. Greenspan’s harsh criticism of President George W. Bush and the contemporary Republican Party. Mr. Greenspan, who describes himself as a “libertarian Republican,” repeatedly bemoans the abandonment by today’s Republicans of what he takes as the core value of conservatism: limited government.
“‘Deficits don’t matter,’ to my chagrin, became part of Republicans’ rhetoric,” he writes. “It was a struggle for me to accept that this had become the dominant ethos and economic policy of the Republican Party. But I’d had a preview of it many years before, in the 1970s, over lunch with Jack Kemp, then a young congressman from upstate New York. He complained that Democrats were always buying votes by boosting spending all over the place. … My sensibilities as a libertarian Republican were offended.”
But Mr. Kemp was right, at least as far as political strategy was concerned. Majority parties in the U.S. have always spent and taxed (or borrowed) their way into the majority. The Lincoln Republicans were the party of high tariffs, big government and public investment. When they turned into the penny-pinching, green-eyeshade party of Alf Landon, it was the turn of the New Deal Democrats to be the majority party of guns, butter and deficits. Reagan and George W. Bush both won reelection by ignoring the advice of libertarian Republicans. Reagan refused to attack Social Security, and Bush presided over the biggest expansion of socialized medicine since L.B.J.: the prescription drug benefit.
By complaining that the Republicans have abandoned their small-government principles, Mr. Greenspan—dubbed “the Undertaker” in his youth by his friend the libertarian guru Ayn Rand—seems to have confused the conservative movement with the quite different libertarian movement. The libertarian movement broke with the Buckley-Goldwater-Reagan conservative movement in the 1960’s over the latter’s support of a big military and its insufficient determination to repeal the New Deal. The temporary Republican majority built by Reagan and Gingrich was built by appealing to populist working-class Reagan Democrats, who reject cultural liberalism but love their New Deal entitlements like Social Security and Medicare and are instinctively hawkish in their foreign policy views. American voters are glad to have the Medicare drug benefit that Mr. Greenspan denounces.
The hostility of even Republican voters to partial privatization of Social Security was so intense that no proposal even came to a vote in a Republican Congress. Mr. Greenspan’s proposed reform of Medicare is likely to be equally anathema to the American people: “Restored balance could occur through the development of private accounts (which I support) or through legislation requiring Medicare to be means-tested (as is Medicaid).” No serious health care economist, as opposed to libertarian ideologues, believes that it makes sense to replace Medicare with a system of tax-favored individual private savings accounts. And the American public likes universal entitlements and loathes means-tested programs for the poor. For someone with a reputation for political finesse, Mr. Greenspan seems oddly indifferent to political reality. But he’s true to his libertarian principles.
While Mr. Greenspan is a much more significant public figure, his book brings to mind a recent book in which another libertarian economist similarly denounces George W. Bush and the Republicans for straying from small-government ideals: Bruce Bartlett’s Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (2006). With the Republican Party now dominated by big-spending populists and hawks, and with New Dealish economic liberalism resurgent within the Democratic Party, libertarians like Alan Greenspan and Bruce Bartlett have nowhere to go. Except, that is, on book tours.
Michael Lind, the Whitehead Senior Fellow at the New America Foundation, is author of The American Way of Strategy (Oxford).