New column: The competent technocrat who became miscast as an all-seeing guru

Posted by wpcomimportuser1 Friday, September 21, 2007 at 12:49 pm

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I've got a new column up online and in the new issue of Time with a shrinking iceberg on the cover (and a cool story by Jamie Graff about the battle for the Arctic inside). It begins:

He has been out of office for more than a year and a half now--and has spent, by his own account, a notable amount of that time in the bathtub. Yet many Americans still want to believe that Alan Greenspan is in charge of the economy.

In olden times, mainly the late 1990s, faith in Greenspan's omnipotence was expressed almost exclusively in positive terms. He was the "maestro," as Bob Woodward dubbed him in a best-selling book; the senior member of the "Committee to Save the World," as this magazine put it in a 1999 cover story; the Federal Reserve chairman who didn't just preside over the longest economic expansion in U.S. history but also was credited with somehow willing it to happen.

Since that long boom ended in 2001, though, griping and whining have been ascendant. Greenspan was a bubble blower, the main criticism goes, a man whose lax monetary policies encouraged excess and speculation. What's more, he failed to thwart George W. Bush's demolition of the budget surpluses built up in the Clinton years. These complaints were steadily gaining in volume, thanks to the collapse of a mortgage-lending boom that began on Greenspan's watch, when the man jumped into the fray in mid-September with The Age of Turbulence, a new book about his life, and a barrage of media interviews to promote it.

So is Alan Greenspan really the root of all economic evil? Uh, no. Read more.

How did I end up (sort of) defending Greenspan? Mainly because the criticism today is so over-the-top. John Cassidy's nuance-free Portfolio takedown to a certain extent set me off (although not nearly as much as it set Brad DeLong off).

Greenspan was a conscientious and more-than-competent technocrat at the Fed. He may not have been entirely up to dealing with the new financial world that his success helped create, and his forays outside of monetary policy became increasingly problematic (and tone deaf) as his time in office wore on. But the current tendency to blame him for every last one of America's economic problems is almost as ridiculous as the late-1990s tendency to give him sole credit for the country's economic boom.