By Stan Collender, NationalJournal.com
© National Journal Group Inc.
Tuesday, Sept. 18, 2007

Details about former Federal Reserve Board Chairman Alan Greenspan's new book, "The Age of Turbulence: Adventures in a New World," leaked out over the weekend and has sent political, economic and financial bloggers into a complete frenzy.

	Greenspan correcting the record seven years later may be a mea culpa, but it is hardly a sign of courage.
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According to published reports, Greenspan heavily criticizes President George W. Bush, his administration and congressional Republicans for mishandling and mismanaging the budget and for putting politics ahead of economics. Greenspan also apparently has great praise for former President Bill Clinton because of his intellectual curiosity, attention to detail and political courage when it came to economic matters.

Three things immediately come to mind.

First, Greenspan's criticism of Bush and the Republicans almost certainly will lead to a coordinated effort to denigrate his accomplishments at the Federal Reserve. In fact, this may have started earlier in the week when various economic analysts blamed Greenspan for the current problems in housing finance and the credit markets. Even though Wall Street cheered Greenspan for keeping interest rates low while he was at the Fed and gave him at least as much credit for the economic good times as the White House tried to claim, some are now saying that Greenspan should have realized the dangers that were lurking and begun to raise rates and take other steps sooner.

It's possible that this seemingly coordinated criticism was actually incidental. It may mark the beginning of a re-evaluation of the Greenspan era at the Fed that would have happened even if the book didn't include direct criticism of the Bush presidency and congressional Republicans.

But given Greenspan's extremely strong public standing and this administration's history of discrediting its detractors (remember what happened to former Treasury Secretary Paul O'Neill when he had a tell-all book published?), it's far more likely that the criticism is planned and will soon extend to political analysts and sympathetic talk-show hosts.

In other words, last week it was CNBC; this week it will be Rush Limbaugh.

Greenspan's statements in the book are likely to be far too politically damaging for the White House to ignore them. Given Greenspan's credibility, they are likely to be taken seriously and, therefore, taint Republicans in the 2008 elections if he is not rebuked.

Second, Greenspan bears some of the blame for what happened because he apparently waited for his book to be published to say things that would have made a huge difference in the budget debates had they been said earlier.

It's hard to know what Greenspan said in private during policy debates. It's certainly possible that he forcefully and repeatedly stated his position directly to the president about what we now know were grave misgivings over the administration's economic policies. Perhaps that's why, as Greenspan reportedly says in his book, he was not part of the Bush inner circle on budget and economic issues.

But regardless of what he may have said privately, Greenspan could have talked publicly about his concerns and used Federal Reserve policies to signal his unhappiness with the administration's policies. For example, it would have changed the politics and debate significantly if the Fed had raised interest rates to offset the increased fiscal stimulus caused by the growing deficits in the early years of the Bush administration.

Greenspan supposedly says in the book that his 2001 congressional testimony -- in which he reportedly gave his unconditional endorsement for the proposed tax cut -- was widely misinterpreted. But he let the misinterpretation stand by doing little at the time to correct it.

That leads directly to the third thing that immediately comes to mind about Greenspan's book: In retrospect, his renowned intellectual adrenaline seems far less exciting because, at least in his later years at the Fed, it wasn't matched by political intensity.

There is little doubt Greenspan had ample opportunities to make his case. He was one of the most visible and vocal Federal Reserve Board chairmen in history, and he could have used his many speeches, interviews and congressional testimonies to say what he thought needed to be said.

It's possible that Greenspan felt he couldn't stop the speeding train that was Bush's tax cut in 2001 and didn't want to damage his ability to deal with future policy issues by being too far on the wrong side.

Maybe he thought strong and vocal opposition might have caused the administration to nominate people to the Fed who were more ideological and less economically savvy.

It's also possible that Greenspan thought he had been too vocal in the past and was re-evaluating his role as Fed chairman, or that he disliked the Bush economic proposals but, without Bill Clinton, feared Democratic policies even more.

But regardless of the reason, correcting the record seven years later may be a mea culpa, but it is hardly a sign of courage.

-- Stan Collender is a NationalJournal.com contributing editor and managing director at Qorvis Communications in Washington, D.C. A frequent speaker on the budget and the economy to audiences across the country, he is also author of "The Guide to the Federal Budget." His blog, Capital Gains And Games, will launch this fall. His e-mail address is secollender@nationaljournal.com.

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