WASHINGTON : A year and a half after leaving the Federal Reserve, Alan Greenspan is back in the limelight with the release of his memoirs just as the economy is at a crossroads and ahead of a critical Fed meeting. The former Fed chairman's new book, "The Age of Turbulence" hits bookstores Monday, allowing the man dubbed "the Oracle" to tell his own tale of nearly two decades at the helm of one of the world's most powerful financial institutions.
According to The Wall Street Journal, Greenspan, who calls himself a lifelong Republican, writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress.
He says, according to the paper, President George W. Bush's failure to do so "was a major mistake."
Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose" in the 2006 congressional elections.
Greenspan puts his own spin on the events surrounding the 1987 stock market crash, the bursting of the Internet bubble as well as the recession on the heels of the September 11 terror strikes.
In a blog opened for him by online bookstore Amazon.com, Greenspan says he will share details of his childhood in New York, his years as a jazz musician and his friendship with US presidents.
"After years of talking 'Fedspeak' in carefully calibrated congressional testimony I could finally use my own voice!" Green says with uncharacteristic verve. He was best known for his careful if cryptic comments on any issue that might affect interest rates.
"I tackled the personal part first, but then started unraveling the detective story about the economy," says Greenspan in his blog. "What did all the economic shifts we began to detect in the late nineties mean?"
His memoirs are due out just as the institution he led for so many years holds its most anticipated meeting in years.
On Tuesday, investors around the world will be closely watching the Fed awaiting some sign that might help counter the effects of the sub-prime mortgage crisis that has rattled markets and led to a squeeze in credit.
The stakes are great: in August the US economy lost jobs for the first time in four years and economists are increasing their talk about recession.
That as Greenspan increasingly is being blamed by some for the crisis. By keeping interest rates so low for so long, some argue, he helped foster the real estate bubble behind much of the current woes.
The former Wall Street guru defended himself in an interview with CBS television, portions of which were released Thursday.
"They are mistaken," Greenspan said in the interview on critics who argue he kept rates too low. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low."
In the interview, Greenspan paid homage to his successor, Ben Bernanke, saying he is doing an excellent job and that he would probably not have handled matters differently.
Greenspan also said he failed to realize the importance of the subprime loan problems "until very late in 2005 and 2006," as he was preparing to step down as Fed chairman, but that in any case he could not have stopped them.
The 81-year-old Greenspan ironically may be more publicly accessible than when he was Fed chairman. He operates a consulting firm Greenspan Associates and has been making numerous speaking engagements. He also has agreed to advise investment firm Pimco and Deutsche Bank.
And he has demonstrated that even as a private citizen, he can roil markets.
When he uttered the word "recession' in a speech in late February it helped send Wall Street on its steepest slide since September 2001.
Earlier in the month, when he compared the current crises to the market woes of 1987 or 1998, Wall Street fell by almost two percent.
Back in 1996, he rattled markets by speaking of their "irrational exuberance."
For some, he ought to be more cautious.
"He should say less," said Hugh Johnson, an analyst at Johnson Illington Advisors. "He's widely respected and has a tendency to move investors, so someone who's that important to investors needs to be very careful about what he or she says." - AFP/ir
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