The WSJ has an overview of Greenspan’s new book. Currently making headlines is his criticism of Bush & the Republicans:
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.“
In another article from the Times, he adds some more:
“…it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,†he says. Greenspan, 81, is understood to believe that Saddam Hussein posed a threat to the security of oil supplies in the Middle East.“
All well and good, but why did you wait until the end of 2007 to say this? In todays climate, anyone can criticize the Bush administration without any threat to your credibility. Clearly he didn’t have the balls to 4-5 years ago when it would have counted. Sure he mentioned deficits about once a year, but these soft words were hardly what was needed. I mean, this guy spent more time telling people to take adjustable rate mortgages (and other creative finance options) at the peak of the housing bubble he created.
The old boy does show some foresight though:
Left alone, he said, the Fed’s policy-making body, the Federal Open Market Committee, can keep inflation between 1% and 2%, but that could require forcing interest rates to double-digits, a level “not seen since the days of Paul Volcker,” his predecessor as Fed chairman. “I fear that my successors on the FOMC, as they strive to maintain price stability in the coming quarter century, will run into populist resistance from Congress, if not from the White House,” he writes. If the Fed succumbs to that pressure, inflation could rise from a little over 2% at present to an average of 4% to 5% by the year 2030, he writes. Ten-year Treasury yields, now below 5%, will rise to “at least 8%” with the potential to go “significantly higher for brief periods.”