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.I'm not a libertarian Republican (although I do have occasional intrusive libertarian impulses) and I'm copacetic with several of the big spending bills that I'm sure Mr. Greenspan opposed. Nor do I think that a bad policy becomes good because it's cheap. But I agree with Mr. Greenspan that the Republican Congress was corrupted so that it started to look exactly like a Democratic Congress. I don't know, though, that that was why the Republicans lost last year or what improvement there could be in changing a Republican Congress for a Democratic one.
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."
But note the different ways Mr. Greenspan approaches the tough decisions he had to make, balancing benefits and costs, with his bright-line approach to criticizing Congress and the President. Politics, and life for that matter, are the art of compromise. Criticism is the assumption of perfection.