Greenspan’s reputation continues to decline

By Felix Salmon
April 9, 2009

Neil Irwin has a nothing-new-here profile of Ben Bernanke in the Washington Post. What struck me, however, was the way that his collegial style was characterized very much in terms of what (and, implicitly, who) it’s not:

To many Fed veterans, his leadership style is a stark contrast with that of his predecessor, Alan Greenspan, whose tenure was characterized by tightly controlled decision-making with only rare open disagreement.

“It’s not Ben’s personality to pound the table and scream and say you’re going to agree with me or else,” said Alan Blinder, a former Fed vice chairman and longtime colleague of Bernanke’s at Princeton University. “It’s not his way. I’ve known him for 25 years. He succeeds at persuading people by respecting their points of view and through the force of his own intellect. He doesn’t say you’re a jerk for disagreeing.” …

“The chair of any committee can respond to comments that challenge his view in ways that essentially inform the committee that the issue isn’t worth discussing. This chairman doesn’t do that,” said Jeffrey M. Lacker, president of the Richmond Fed, who worried that the Fed was putting itself in the uncomfortable position of allocating capital in the economy. “He takes other views seriously.” …

“He tries to bring as much input as possible,” said Kansas City Fed President Thomas Hoenig. “He’s always been willing to ask questions, accept input and be responsive to that input.”

We probably knew that Alan Greenspan was never a big fan of getting lots of input from the FOMC. But this looks to me very much as though Jeffrey Lacker is going on the record as implying that Greenspan didn’t take other views seriously, and that Alan Blinder is going even further than that.

Once upon a time, even after Greenspan’s departure, such high-ranking officials would have been careful to disavow such implications. Now, they don’t seem to care any more. If Greenspan is upset by this kind of thing, who cares. He’s a historical relic at this point.

12 comments

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Alan Greeenspan is the sole responsible for the current economic crisis. During the 1990s, Greenspan miserably failed to regulate the financial institutions. He should keep a very low profile and keep his big mouth permanently shut

Posted by George | Report as abusive

Also we can blame Reagan, Bush 1, Clinton and Bush 2 for reappointing him

Posted by dusty | Report as abusive

Greenspan knew one trick: stimulate and create wealth-effect growth (and debt). He got away with due to concurrent deflationary pressures, but he blew four or five bubbles in his short career. He was a fraud.

Posted by the8thdayman | Report as abusive

Woodrow Wilson is responsible for the current economic crisis by allowing the Phony Federal Reserve to be created in the first place.

Posted by Thomas Scott | Report as abusive

You never heard anything like this while Greenspan was at the Fed. Where there any journalists that weren’t afraid to show this side of him? First he was the super-hero, now he’s becoming one of the arch-villains.

It seems like Greenspan was a somewhat arrogant prick who was enabled on a mass scale into becoming a monumental prick. It takes an adoring nation of millions to raise a prick of that scale. It could have happened to many of us, maybe any of us. But it’s comforting to make him the “other” now.

Shorter Blinder: Alan who? I had nothing to do with that.

Posted by SelenesMom | Report as abusive

How could so many people put their trust in Greenspan, a man who, when he spoke, encrypted his speech. How did they put up with it? Fools, all of them!

Posted by MariAngela | Report as abusive

When is America going to wake up and realize the
problem is the Jew ?

Posted by Izdatrite | Report as abusive

Greenspan as I observed him different hearing where he would give a discourse for 5-10 minutes and in the end it did not mean anything either intellectually or in substance. Depending on your intellect or line of thinking you would never understand most of it anyway.
This is how he fooled american people politicians and everybody around him.

Posted by VJ | Report as abusive

Mr. Scott is correct, the damage was done when that racist liar Woodrow Wilson enabled the Jekyll Island boys to have their way with him. He got you-know-what and did not even get kissed. The alleged Federal Reserve is not in any way ‘federal’ and has no reserves.

In the crisis of the Depression they were allowed to take over our currency and now we have “Federal Reserve Notes” which are debt instruments and not genuine money as the greenbacks of Lincoln’s time were. What a fraud.

Posted by Richard C. Green | Report as abusive

Alan Greenspan was seduced by the “dark side”. In the late 1960s, he wrote a paper that, essentially, told the world that gold must be preserved as the world’s exchange currency. He said that only gold is capable of preserving wealth against the depredations of fiat money governments, who can use the printing press at will.

Yet, in order to gain power, and curry favor with the powers-that-be in Washington DC, Greenspan turned traitor to his own convictions, and became the biggest fiat money printer, and economic manipulator short of Ben Bernanke. He turned to the dark side.

We are now suffering the consequences.

Posted by JohnMD | Report as abusive

I can’t make heads or tails of this issue. We had lots of crashes before the advent of fiat currency, so how does that make the Fed bad? Is there really any objective way to tell if the Fed is making things better, worse, or if it’s just irrelevant? I lean a tad Keynesian myself, but what about the past decade in Japan? Austrians think Greenspan’s policies precipitated the crisis and that the stimulus is a huge mistake, not to mention the Fed itself. I get the low interest rate = RE bubble thing, but it was poor risk mgt that was the weak link. I don’t really follow the argument. Monetarists I can’t figure out, they just seem grumpy right now, like they don’t like the Keynesian stimulus but aren’t quite sure what they would have done (?) Someone can set me straight on this point, I’m sure. Calgon, take me away!

Posted by American_Fool | Report as abusive