Greenspan book is half memoir and half treatise

格林斯潘回憶錄一點點

Greenspan gives a withering critique of Republicans

【聯合報╱編譯廖玉玲／綜合華盛頓十五日外電報導】 2007.09.16 01:34 am

曾任美國聯邦準備理事會主席將近廿年的葛林斯班在最新出版的回憶錄中砲火全開，抨擊布希政府沉迷於政治操弄，不顧財政原則。在葛林斯班的筆下，布希的前兩任財政部長歐尼爾和史諾本質上無能無用。 葛林斯班的新書「動盪年代：新世界的冒險」（The Age of Turbulence: Adventures in a New World，暫譯）定十七日出版，正好就在聯準會公布最新利率政策的前一日。在五百頁厚的新書中，葛林斯班直指布希從來不願控制支出，也不否決讓政府赤字 惡化的法案；先前共和黨主政下的國會，眼中同樣只有權力，共和黨去年輸掉兩院，葛老認為並不冤。 不過，布希還不至於一無是處。葛林斯班稱讚布希讓聯準會在政治的壓力下仍能維持獨立性，布希儘量不去干涉貨幣政策，和老布希的做法截然不同。老布希曾把他一九九二年敗選，歸咎於葛林斯班不降息以拉抬經濟。 葛林斯班用不少篇幅談他對市場和全球化的看法。在能源方面，葛林斯班建議多用核能，並預測人類恐怕無法以限制溫室氣體排放量和徵稅的方式解決全球暖化的問題。此外，貧富不均的現象愈來愈嚴重，恐怕會破壞維繫社會安定的力量，甚至導致「大規模的動亂」。 葛老還預言，由於全球化進展減緩，未來幾年通膨恐怕更難控制。近來中國大陸輸入美國的產品不斷漲價，且長期利率攀高，代表美國很快會出現通膨。

PAGE ONE

Greenspan Book
Criticizes Bush
And Republicans

'They Deserved to Lose';
Former Fed Chief Defends
Pre-Bubble Rate Cuts

By GREG IP and EMILY STEEL
September 15, 2007; Page A1

In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to which he has belonged all his life deserved to lose power last year for forsaking its small-government principles.

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.

The book is scheduled for public release Monday. The Wall Street Journal bought a copy at a bookstore in the New York area.

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."

He attributes the housing boom to the end of communism, which he says unleashed hundreds of millions of workers on global markets, putting downward pressure on wages and prices, and thus on long-term interest rates.

Mr. Greenspan retired in early 2006 after 18 years as chairman of the Federal Reserve. He had served under six presidents as either Fed chairman or adviser. He now runs a private consulting company; his only formal public role is adviser to British Prime Minister Gordon Brown.

Penguin paid an advance of more than $8 million last year for Mr. Greenspan's book, according to people familiar with the matter. Promotion for the book includes appearances by Mr. Greenspan on CBS's "60 Minutes," NBC's "Today" and CNBC, interviews with foreign and U.S. media, book signings and speaking engagements. The book's official release comes a day before the most-watched Fed meeting of the year. On Tuesday, Mr. Greenspan's successor, Ben Bernanke, must decide whether to cut interest rates to cushion the economy from the reversal of the housing boom that began under Mr. Greenspan's watch.

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.

Mr. Greenspan writes that when President Bush chose Dick Cheney as vice president and Paul O'Neill as treasury secretary -- both colleagues from the Gerald Ford administration, during which Mr. Greenspan was chairman of the Council of Economic Advisers -- he "indulged in a bit of fantasy" that this would be the government that would have resulted if Mr. Ford hadn't lost to Jimmy Carter in 1976. But Mr. Greenspan discovered that in the Bush White House, the "political operation was far more dominant" than in Mr. Ford's. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he writes.

From serving under so many presidents, Mr. Greenspan concludes that there's something abnormal about anyone willing to do what it takes to get the job. Mr. Ford, he writes, "was as close to normal as you get in a president, but he was never elected." The Watergate tapes, he says, show Richard Nixon as "an extremely smart man who is sadly paranoid, misanthropic and cynical." He recalls telling someone who had accused Nixon of anti-Semitism that he "wasn't exclusively anti-Semitic. He was anti-Semitic, anti-Italian, anti-Greek, anti-Slovak. I don't know anybody he was pro."

Ronald Reagan's ability to instantly tap one-liners and anecdotes in support of a particular policy represented an "odd form of intelligence." 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."

Mr. Greenspan makes no mention of his successor as Fed chairman, Mr. Bernanke, other than in a caption accompanying a picture: "I was very comfortable leaving the post in the hands of such an experienced successor," it reads.

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. He recalls meeting a former manager of a produce distribution center in China who says he once had to labor to allocate produce according to government edict; now the allocations are made by auction. "Now I don't have to get up at four a.m.," he quotes the manager as saying. "I can sleep in and let the market do my job for me." Mr. Greenspan recalls his amazement when an adviser to Russian President Vladimir Putin asks him to discuss Ayn Rand, the libertarian philosopher with whom Mr. Greenspan had been friends.

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.

Write to Greg Ip at greg.ip@wsj.com and Emily Steel at emily.steel@wsj.com