with Greg Ip of the WSJ.
The way that Greenspan protected and established the independence, authority and prestige of the central bank was by being more political than the politicians who criticized him. If they wanted to leak bad stories about him, he would leak three bad stories about them. If they wanted to try and entrap him in politics, you know what? He had contacts in the Senate. He would go over there and so and so, who was his enemy, suddenly would not get confirmed to a big administration position. So he knew the dark arts of politics better even than the politicians did.
…This model of the empowered expert, the political guru, is now in retreat in the era of Donald Trump, but it isn’t totally gone. I would say that’s the central legacy that Alan Greenspan has left to the United States.
Read the whole interview.
So he was the modern Fed’s version of Hoover!
I think Greenspan was able to stay so long because the economy did a good consistent growth from 1987 – 2005 and it seemed like he a decent handle on things. (He left at the right time.) Sure there were some bubbles during his tenure but outside of the housing one, I really don’t understand how the Fed creating them. In reality US interest rates during the dotcom height (98 – 00) were not low and it seemed like private investors were rushing towards the future with little regards of reality.
Mallaby really had to go to the basement of a shack in the woods to find G’s old speeches? That is commitment. That was a lot more work than ripping off “Market Wizards” for his hedge fund book.