Former Federal Reserve Chairman Alan Greenspan has a new book that probably will not be a favorite in Republican circles.
Greenspan, 81, famous for his frequently inscrutable comments in his two decades as Fed chief, has become a bit more plainspoken since retiring last year. In his book — entitled, The Age of Turbulence: Adventures in a New World — Greenspan says congressional Republicans "swapped principle for power," and "ended up with neither."
Greenspan, who calls himself a libertarian Republican, writes that the GOP deserved to lose control of Congress last year, for failing to rein in spending. He is equally hard on President Bush. In an interview with Leslie Stahl on 60 Minutes Sunday night, Greenspan faulted the Bush administration for leaving in place tax cuts, even as deficits mounted.
"Their economic policy, largely, was to take the proposals made during the campaign when there was a prospective very large surplus and those policies continued in place, irrespective of what was happening to the surplus ... it was wrong," Greenspan said.
The ex-Fed chief writes that he expected more from the Bush White House, having served alongside Vice President Dick Cheney and former Defense Secretary Donald Rumsfeld when Greenspan was one of President Gerald Ford's economic advisors.
Greenspan writes that politics carries much more weight in the Bush White House than it did under President Ford. And he told 60 Minutes that he is disappointed by Vice President Cheney.
"He was much less focused on restraining spending than I would have liked," Greenspan said.
Clinton was 'Extraordinarily Effective'
The book is kinder to former President Clinton. Although Greenspan said he was saddened by the Monica Lewinsky scandal, he writes that Clinton shared his own thirst for information, and held a "consistent, disciplined focus on long-term economic growth."
"Even though I clearly was a Republican, I had to admit, he was an extraordinarily effective president," he said.
Greenspan's 60 Minutes interview — like his book — was not all business. He talked about writing the manuscript longhand, largely in the bathtub, and about wooing his wife, Andrea Mitchell, with an essay on the Sherman Antitrust Act. He also confessed that some of those impenetrable comments he made while Fed chairman — when he was addressing Congress, for example — were mysterious by design.
"I would engage in some form of syntax destruction which sounded as though I were answering the question, but in fact, had not," he said.
Influence Still Felt
Although Greenspan usually draws praise for his leadership of the Federal Reserve, some have criticized the Fed's decision to cut interest rates to as low as 1 percent earlier this decade, saying that contributed to the mortgage-credit bubble that is now bursting. Greenspan still says it was the right move at the time.
"It was our job to unfreeze the American banking system, if we wanted the economy to function. This required that we keep rates modestly low," he said.
Although he retired last year, Greenspan still has the power to send shock waves through the financial world, especially when he uses words like "recession," as he did earlier this year. He told 60 Minutes that he plans to keep talking about broad economic trends.
Greenspan's successor, Ben Bernanke, meets with other Fed officials on Tuesday, where he is widely expected to cut interest rates for the first time in more than four years.