The Age of Turbulence: Adventures in a New World
By Alan Greenspan, The Penguin Press, New York, 2007
When Greenspan retired (January 2006), people hailed him as the greatest central banker of all time. Since then,
his reputation has diminished. (Is this a tribute to overanalysis of the present? I.e., when he retired, the economy
looked okay, so we said he was great. Now it looks weak, so we say he was weak.)
When his book came out in Sept. 2007 the reviewers praised Greenspan for being honest, in general, and they
agreed that he knew a lot about the economy. But they said that Greenspan should have told us about items like the
Bush budget policy of running deficits and the housing market bubble. The commentators avoided discussions of
monetary economics, generally. Nobody knows what it really is, yet they talk about it as though it is concrete.
Questions like, does policy work, how does it work, does it depend on a central bank and its head, etc. were not of
as much interest to people as the politics and personalities were.
Why should you scrutinize this book? Greenspan is, arguably, the greatest intellectual of our times. Name someone
greater. Remember, Greenspan was a doer, not just a pundit.
Did Alan Greenspan think he was a seer? Did he think he pulled it off, or was just lucky? He seems to think he did
call the productivity surge of the 1990s, the tech effect. He takes credit for much excellent work, including
forecasting accuracy during his early career. P. 71, predicted the turnaround in the economy to happen in mid-
1975. Quite pin-point accuracy. He takes credit for many “soft landings” of the economy, engineered during his
term at the Fed. They may have happened without him, or the Fed.
Does he rationalize? Did he explain events after they played out? To some extent, in my opinion.
Does he blame others? Not really. Is he humble? He does admit he was wrong often enough. E.g., he thought Hong