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The Greenspan Mystique

How much credit does the Fed chairman deserve?

Dec 11, 2000, Vol. 6, No. 13 • By JAMES K. GLASSMAN
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Maestro

Greenspan's Fed and the American Boom

by Bob Woodward

Simon & Schuster, 270 pp., $ 25

 

Greenspan

The Man Behind the Money

by Justin Martin

Perseus, 284 pp., $ 28


We may not have a president soon, but we'll have someone just as powerful: an infallible philosopher-king named Alan Greenspan.


That, at least, is the way much of the world views the seventy-four-year-old economist and clarinetist who has been chairman of the Federal Reserve Board through the longest unbroken period of growth in history: 116 months and counting. It's safe to say the Fed -- which has authority to set interest rates and thus adjust economic growth -- is Greenspan, but he has become something more: He helped form the fiscal policy that produced the biggest budget surpluses the world has ever seen.


But how good is Greenspan? And why is he so popular, considering that his job, as old Fed chairman William McChesney Martin put it, is to "act as a chaperone, taking away the punch bowl when the party gets too wild"?


On the second question, Bob Woodward in Maestro: Greenspan's Fed and the American Boom has a convincing answer. "In this culture," he writes,


politicians, actors, and nearly all public figures are produced and handled. Greenspan emerges as one of the few who seems to maintain a steady and sober detachment. . . . Although his words are almost unbearably opaque, he appears to be doing something rare -- telling the truth. . . . The public has rewarded his caution, reflection and the results with their confidence. That he is the unelected steward of the economy is simply accepted.

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