Alan Greenspan's Underwear Drawer

ALISON STEWART, host:

When we set out to get into the head of former Fed Reserve Chairman Alan Greenspan, we never imagined the journey would take us into the underwear drawers of America. It turns out you can tell a lot about the state or the country's economy by the state of men's underpants. At least that's what Alan Greenspan seems to think.

Mr. Greenspan released a 500-plus page book in September called "The Age of Turbulence: Adventures in a New World." He analyzed, dished about, and explained the events that made up his time as Fed chairman.

But it wasn't the first time he'd been revealing to the press. NPR's esteemed science correspondent Robert Krulwich, who in his former life, was an economic corresponded for NPR, CBS and ABC, spent some quality time with Mr. Greenspan. And the BPP's Luke Burbank and I spent some quality time with Mr. Krulwich getting the low down.

So Robert, what is the one thing that Alan Greenspan seems to understand about economics that others don't?

ROBERT KRULWICH: I love - he had this place, Alan Greenspan, on the east side. It was one of those - it looked kind of an insurance company or something. But what he would do is he would keep his ear as low to the ground, trying to figure out what he just told John(ph) - what are people really up to?

So the kinds of ways he do this is he would look, say, a dry cleaning sales, because he thought people who send their clothes to dry cleaning are doing something slightly luxurious. I mean, you could do it in the laundry. So when you're feeling good, you send a few extra shirts to dry cleaning.

So he took the dry cleaning stats very, very seriously. And I remember once, we're talking - and I love the drywalls. I've never seen a drywall because that mean people is doing a lot of home improvement. How many trucks are on the road? But men's underpants was the one that really got to me.

He once told me that if you think about all the garments in the household, the garment that is most private is the male underpants because nobody sees it except people like in the locker room and who cares. Your children need clothes. Your wife needs clothes. They have to change. The children grow. You need clothes on the outside.

LUKE BURBANK, host:

Mm-hmm.

KRULWICH: But the last purchase that you don't have to make is underpants. You get a hole in your underpants.

BURBANK: We will wear those things until they're in complete tatters.

KRULWICH: Total tatters.

STEWART: Yes, what is with you men in that?

BURBANK: Ask Alan Greenspan.

STEWART: That's the next segment.

KRULWICH: So he would look - if you look at the sales of male underpants, it's just been much a flat lie, hardly ever changes. But on those few occasions where it dips, that means that men are so pinched that they are deciding not to replace underpants. And he said that is almost always a prescient sort of (unintelligible) here comes trouble.

And I said, so, he's been noticing the dip in your underpants is very, very small. And I think, wow. You know, it's not that he was right or wrong. It's just - I just loved the way he would sneak around human behavior by like looking at things like that.

STEWART: It's interesting that they don't teach a course in the London School of Economics about charting male underpants. Yet, Alan Greenspan threw this out.

KRULWICH: (Unintelligible). Yeah, it was like people are greedy, fearful and pretty much deeply mysterious and quite crazy. And so if you - but there is a sort of a science that say if you put enough of them in a pot, you can tell some stuff about an economy. So he would put various attitudes of human in a pot and study them like an oracle. And - given his due, he was pretty close to right much of the time.

STEWART: He was sort of known for his cryptic but telling comments. Everybody remembers irrational exuberance.

KRULWICH: Yeah.

STEWART: In the '90s, he described the stock market there. Do you think he uses language effectively?

KRULWICH: Yeah, because he's such a good storyteller. I mean, he's an absolutely a great storyteller. And he could keep me spellbound in the room. And then he gets this fancy job as a central banker. And suddenly, he can't say how, you know, the street was crossed by me would be kind of a clear version. He never, in fact, crossed it.

STEWART: Mm-hmm.

KRULWICH: And he would graciously say the whole traversing of the logic(ph) were I mostly accomplished by people that (unintelligible) if you get my drift on it. And you don't know what he was talking about. But that was a guy who knew how to talk and chose not to.

BURBANK: Do you think that killed him?

KRULWICH: No, no, no, no. You understand that the job he held, the job that central bankers around the world held - going to your issue about why people are so polite - this is an enormously powerful job. If I raise the price of how much it cost you to borrow, that's all the kids who want to go to college are now going to have to pay more; all the farmers who want to buy seed are now going to have to pay more; all of the people who want to buy wall-to-wall carpets are going to have to pay more. I have just imposed an enormous tax on everybody, now who will (unintelligible) the head of the Federal Reserve, nobody?

STEWART: But he gets to stick around for really long time…

KRULWICH: Longer than a president. In a Democratic society, the Germans, the Americans, the Canadians, the British have created this role that is sort of separate from politics of an independent person, beholden to no one, who can take an enormous amount of money from people who have some and give it to people who don't, or take an enormous amount of money from people who are borrowing and give it to the lenders. This is a very odd situation.

And because countries need to be able to handle money, they have essentially established a sensitive little place off in the corner where powerful people can work outside the normal responsibilities of politics. The central bankers understand that and they're probably a little PO-ed at Alan Greenspan for taking on political leaders in such a raw way.

But the political leaders are also aware that they don't want to have to raise and lower taxes enormously on people, so they let these people alone. So when you talk about Cheney being careful and tiptoeing, he's tiptoeing around a central banker, as much as he's tiptoeing around the guy who actually was his buddy.

STEWART: Well, that's my next question. Didn't he break some sort of code of the covenant? These folks usually don't speak so bluntly, as in the Bush administration did this the wrong way; these people deserve to lose in this election. Those words coming out of Alan Greenspan…

KRULWICH: Yeah.

STEWART: …seemed…

KRULWICH: You're right.

STEWART: …a little shocking.

KRULWICH: I think that Bernanke and Volcker, his predecessor - those are the Americans - and the German guy and the British guy and the Japanese guy, I think he might had he done that. We all live how to be not supposed to kick these guys and they don't kick us. So there was a little kick-thing going on.

BURBANK: I was wondering you mentioned Ben Bernanke. I don't want to take it off of Alan Greenspan. But, I mean, is there going to be a cult of Ben Bernanke someday or is it something - aside from just his tracking of underwear pattern, something constitutionally about Alan Greenspan that made him this interesting guy to us?

KRULWICH: No, he's just the one that has heard most recently. The one before him, Paul Volcker, was tall, smoked big cigars and had the same strange mythic - because he's so tall. Strange mythic quality, there's something else - the job creates the mystique. And not - I don't think Alan Greenspan in particular. He's such a long run. So, you know, he's the only - it was like, when I was growing up, President Eisenhower, I thought, was the name of the job. I didn't know that you could…

STEWART: My mommy said (unintelligible) Roosevelt. She's like I don't know any other president besides Roosevelt…

KRULWICH: That was the only one I knew.

STEWART: The Greenspan haters are out. It's not just all golf claps around, whenever Alan Greenspan walks into a room. A lot of people, Paul Krugman, pull equipment and in the New York Times saying, hey, you were there, you could have done something about this fiscal irresponsibility, if you were so concerned. Does he deserve some of these criticisms?

KRULWICH: I mean…

STEWART: As a reporter?

KRULWICH: As a reporter. I think it's fair to say that when you have, you know, Tina and Billy going to borrow money for a house. Then who are Tina and Billy? Well, she's 21, he's 23. They've just not - missed one payment on the car, but only one. They still have student loans.

Then what would they want to do? They want to buy a 300,000 and get a loan for $300,000. And they're going to get it? And she's pregnant? I mean, this doesn't look like a solid loan. In fact, this almost looks, as Alan said, a little bit like somebody got them so excited about the house that they just wanted to snatch their money, their pink mortgage payments and run off with them.

And there is something really vile about what was going on in America for the last six or seven years. People who really wanted to live in houses were buying houses way out of their league. And it was pretty clear they weren't going to be able to pay, and people were urging them to do it.

And I think that the head of the Federal Reserve, watching it go on everywhere that you all know the strange loaner interests that were being made that that was a very, very, serious bit of leading people, innocent people to slaughter. Now, we have all these problems.

But they were very, very, foreseeable. I mean, if our guy is going to be good at telling the future, this is an almost like a fact, you know. You give that kind of money to people who are that poor and that new in the market, you're going to get trouble.

BURBANK: That really surprise me because he was so famous for talking about irrational exuberance and being such a sort of careful guy. But when I bought my house, I mean, I was amazed at when I went in there how easily - I mean, everyone gets paid off when you buy a house, the mortgage broker - all the way down the line and they're just - it felt like to me like it was kind of a land grab. And I thought Alan Greenspan is a conservative guy. This is all going on his watch. It just doesn't surprise me.

KRULWICH: And the classic movie version, I think its Spencer Tracy and Kate Hepburn sitting in Westchester. They bought a house in one of those movies. And it's been 30 years, they've had the house (unintelligible) old couple, and they have a ceremonial burning of the IOU of the mortgage because it's such an achievement that would have done very careful, very special, very dutiful, very serious thing and then you get under this, under Greenspan's. Here take three as well, 400, 500, you can…

STEWART: He haven't actually paid my car bill.

KRULWICH: Never mind that kind of thing.

STEWART: By the way, don't burn the mortgage. That's an old, wives' tale. You should do that or at least make a copy if you're going to do it.

Before we let you go, we got over a minute left. Greenspan is soft-spoken. You know, he stood his ground with Leslie Stahl there.

KRULWICH: Yes.

STEWART: Hendrick (unintelligible) - I hope I'm practiced. In the times that you've interviewed him, was it ever combative? Was it - did you get in good debates? Was he willing to engage.

KRULWICH: At one time, I was doing something for NPR and I was leaving my microphone around and I accidentally hit a glass bowl on his table. And the ball shattered and I looked at it and said what remains to the ball a gift to Alan Greenspan from the King of Finland.

(Soundbite of laughter)

KRULWICH: And I looked at it and said, oh, gee, so I went to a Pottery Barn and I got him a replacement bowl, which is really kind of… It was sort of a glass and got a little plastic on it and I brought it to him. I wrote, you know, in the bottom, from the prince of Finland. And my wife said that was really, really stupid.

MARTINEZ: Did he laugh when you gave it to him?

KRULWICH: I cannot remember (unintelligible)…

I think I was afraid to face him, you know.

STEWART: So that's as rough as it got.

MARTINEZ: I mean, you know - a guy has a bowl from the king of Finland.

KRULWICH: We should put it in that, you know, in all (unintelligible)…

MARTINEZ: But, you know, the NPR people very aggressive, very truth-seeking, and we hit you with your microphone.

STEWART: That was NPR's science correspondent Robert Krulwich, former economics correspondent for NPR, CBS and ABC and self-proclaimed Prince of Finland, and very good friend to THE BRYANT PARK PROJECT.

MARTINEZ: Yes, indeed. Yes, he is.

STEWART: You want to explain why Robert is important to our show, producer Matt Martinez?

MARTINEZ: Well…

STEWART: This is your wheelhouse.

MARTINEZ: You know, we try to put together the best show possible everyday and the tidiest show possible and we try to make sure that things don't blow up while the show is on the air.

STEWART: And we're live. We're very live.

MARTINEZ: We're very live. Most of what you're hearing is happening as it's happening. And sometimes guests don't show up their phone line poops out and so we have to go to what we call an emergency Krulwich. We always have a Robert Krulwich piece in the can, ready to go, ready to deploy because they're brilliant and they're wonderful and they can be used at anytime.

STEWART: And we have a big, white erased board in our work area that it counts the number of days we've not have to deploy the emergency Krulwich.

MARTINEZ: If we get through today, it will be 14 days since we last deployed an emergency Krulwich. Now we purposefully deploy a Robert Krulwich on Christmas.

STEWART: We did.

MARTINEZ: So we're not counting that, but 14 days since we had to deploy any emergency Krulwich.

STEWART: So thank you, Robert Krulwich, for all the work you do on several different levels - little behind-the-scenes look at what goes on here at the BPP.

Coming up on this show today, when beauty contestants attack, I mean, speak and a fine minds of the BPP actually unscrambled the words of Miss Teen South Carolina. We also have the smooth sounds of NPR fan and musical guest Ben Harper. That's coming up on the BPP from NPR News.

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