Former Federal Reserve Chairman Alan Greenspan is the latest into the bookstores with a revealing book that takes a sharp look at the Bush Administration. In the Washington Post, Bob Woodward (himself the author of a book about Greenspan), cites this criticism by The Maestro:
“My biggest frustration remained the president’s unwillingness to wield his veto against out-of-control spending,” Greenspan writes. “Not exercising the veto power became a hallmark of the Bush presidency. . . . To my mind, Bush’s collaborate-don’t-confront approach was a major mistake.”
On the other hand, Greenspan gives high praise to former President Clinton, whom he says had an extraordinary interest in and grasp of economic data.
However, it is worth remembering the central role that Greenspan played in enabling the Bush economic program to happen. In the first days after the 2001 inauguration, Greenspan warned of a danger that the budget surplus (remember the surplus?) could actually become too big and drag down the economy. And thus, Greenspan gave the green light to Bush’s tax cuts.
In his book, the NY Times says, Greenspan acknowledges that he was cautioned not to make such an endorsement, by none other than Robert Rubin, the head of that Clinton economic team that he regarded so highly:
Though Mr. Greenspan does not admit he made a mistake, he shows remorse about how Republicans jumped on his endorsement of the 2001 tax cuts to push through unconditional cuts without any safeguards against surprises. He recounts how Mr. Rubin and Senator Kent Conrad, Democrat of North Dakota, begged him to hold off on an endorsement because of how it would be perceived.
“It turned out that Conrad and Rubin were right,” he acknowledges glumly. He says Republican leaders in Congress made a grievous error in spending whatever it took to ensure a permanent Republican majority.
But Greenspan presided over the Fed for another five years. So it seems fair to ask: Why did he wait until he had an $8.5-million book deal to tell us this?