Alan Greenspan proved this weekend that he's a most newsworthy octogenarian. He made waves on several fronts in a book promotion tour disguised as a news event.
chairman is making waves from the sidelines. Disgruntled with politics and critical of the Bush tax cuts, this consummate conservative is coming clean.
Greenspan, who's promoting his new book,
The Age of Turbulence
, thinks current Fed chief Ben Bernanke is doing "an excellent job," and I particularly enjoyed the exchange between Lesley Stahl of CBS'
and Greenspan on
pressuring the Fed to lower rates:
Stahl: "The CEOs of Ford and Chrysler are begging the Fed to lower rates. I mean, on their hands and knees."
Greenspan: "I would suggest they focus on selling, creating better cars."
His tone comes off as shockingly stern considering he was so careful to stop market meltdowns during his tenure. We will find out tomorrow when the Fed meets if Bernanke follows his lead or has a more bare-knuckles approach.
Greenspan's grandfatherly advice hasn't been limited to CEOs. He spoke out on the Iraq War and his assessment of the current political parties. In his book, for example, he writes that, "the Iraq War is largely about oil," adding, "I'm saddened that it is politically inconvenient to acknowledge what everyone knows."
The White House quickly took issue with Greenspan's statements. "That sounds like Georgetown cocktail-party analysis," said spokesman Tony Fratto on
. "The reasons we went to Iraq are well understood and had to do with
weapons of mass destruction, enforcing U.N. sanctions."
Greenspan hadn't limited his criticism of the Bush administration to the war. He's also attacked Bush's fiscal agenda as Bush failed to veto spending and cut taxes and enlarged Medicare in the face of growing deficits. Greenspan said: "In the revised world of growing deficits, the
campaign goals were no longer entirely appropriate."
Fratto responded, "We had veto threats, which were used to good effect to keep spending within the president's numbers. Because Congress worked with us, vetoes weren't necessary."
Fratto commented on the administration's spending. "We're not going to apologize for increased spending to protect our national security," he said. "That isn't just 'increased spending,' it's an investment in the safety and security of the nation."
Greenspan's disdain also found the Democrats. He praised former President Bill Clinton for his fiscal moves, calling Clinton a "centrist." But he believes the Democrats have become populist and have "moved very significantly in the wrong direction." He particularly dislikes the Democrats' views on trade.
Greenspan appears to be disenchanted with American politics. He still remembers the "clarity of conservatism" of President Ronald Reagan, but takes issue with both President Bush and his father, as well as Richard Nixon.
Obviously, he faults the current Republicans on deficits. "The Republicans in Congress lost their way," writes Greenspan in his book. "They swapped principle for power. They ended up with neither. They deserved to lose
the 2006 elections."
When Stahl asked him about Hillary Clinton and how he would vote, he responded: "I doubt if I would vote Democrat. I just may not vote. At the moment it's extremely hard to say."
Greenspan's gloom reflects on the economy, as well. In the second half of his book, he looks into the future and doesn't like what he sees. Greenspan focuses mostly on globalization and financial markets. He worries about rising interest rates in order to combat inflation.
It is possible that Alan Greenspan is trying to influence Fed policy from the sidelines. Will the gloom he sees in his book convince Bernanke to invoke the Greenspan put? We'll find out when the Federal Open Market Committee meets tomorrow.