The MT Diary

Greenspan at the LSE; even Texas cools to George W; New Yorkers weep at RSC's Lear.

by Howard Davies
Last Updated: 31 Aug 2010

The Browns really pushed the boat out for Alan Greenspan when he came to London to promote his new book, The Age of Turbulence (see review, p33). Breakfast and lunch in Downing Street, and even the much-maligned Chequers was opened up and dusted down for a Sunday roast. Not surprising, perhaps, as Greenspan is very kind about Brown's economic record and thinks Britain is well placed to prosper in the 21st century.

He took time out of this love-in to visit the LSE and answer questions from me and the students. Since I have been at the school I don't think I've ever heard of a student being seen in a lecture theatre or a classroom at 6am, unless they were sleeping off a particularly heavy night. But there were queues around the block at that time of the morning for tickets to hear him speak, which went on sale at 8am at the attractive low price of nothing.

In box-office terms, he is right up there with Led Zeppelin and the recently reunited Spice Girls. At 81, he may be marginally less sprightly than the girl band, but his exposition of econo-mic and market trends is as sinuous and closely argued as ever.

Unfortunately, following the summer liquidity crisis, he has joined the bears. The overhang of unsold houses will, he thinks, depress the American property market for some time, feeding through to lower consumer spending via the so-called wealth effect. So the American consumer of last resort, who has sustained the global economy for so long, may well take time out.

Pressed on the probability of a recession over the next six months, he put it at approximately 42.35%. That's a pass mark in most exams. And he was particularly pessimistic on the prospects for Chinese equities, which have been constantly hitting new highs. So if you are long the Shanghai market, you have been warned.

As it happens, the Conservatives had chosen that very day to announce an exciting new policy on Bank of England governorship appointments. In future, under the Tories, a governor would be appointed for only one, non-renewable term.

Predictably, since he served 19 years at the Federal Reserve, Greenspan was not attracted to George Osborne's wheeze. In his view, a governor isn't getting the ball onto the middle of the bat until year four or five, so it is foolish to dispense with their expertise then.

He went on to deliver a glowing and persuasive testimonial to the current incumbent in Threadneedle Street, Mervyn King, who had a rough press after the Northern Rock debacle. I nonetheless thought it prudent to ask whether, if a vacancy does unfortunately arise, Greenspan himself might be available. That merited a withering, 'from under which stone have you crawled?' kind of look, which I took as a no.

Over in the US, most of the comment on his book has focused on the trenchant criticisms of George Bush's fiscal policy, and his passing observation that the Iraq war was mainly about oil. I guess that was to be expected among the Democrats and the pinkoes on the New York Times, who welcomed an unlikely new ally.

When I visited Houston the other day I expected these comments to have gone down badly in Texas, the home state of George W, but in fact that was not so clear.

Just now the president would have trouble carrying his home state. They are a bit disappointed in their favourite son, I fear, even in the Bayou Club, a venue so discreet that there is no name even on the door and if you have to ask where it is you can't get in. (For anyone who is interested, it is right next door to the Houston Polo Club).

It's where the Texan old money hangs out. But I discovered that in Texas, old money is not as old as all that. I'd visited Houston just once before, in 1969, during what we didn't in those days call a gap year. And in three days in the city recently I met only one person who had been there before that date. Nor did anyone remember that Sir John Barbirolli had been principal conductor of the Houston Symphony Orchestra at the time when he was also conducting the Halle band in my home town of Manchester. I did not expect to find myself contributing to Texan oral history, but so it turned out.

On a night off, I went to the baseball. The underpowered Houston Astros, stuck on the launch pad just now, were entertaining the high-flying Chicago Cubs. I asked the taxi to take me to Enron Field, as it used to be called in Ken Lay's glory days. The driver did not find my little joke at all amusing, and dropped me deliberately at the wrong entrance to Minute Maid Park, as it now is. Served me right.

And so to New York, where the Royal Shakespeare Company was in residence at the Brooklyn Academy of Music, a semi-restored Victorian pile that had been rescued from cinematic oblivion by Peter Brook and others some 30 years ago.

Its crumbling stucco and peeling paintwork formed the perfect background to Ian McKellen's King Lear. For three and a half hours the credit crunch paled into insignificance as Lear's Britain imploded. We may have queues outside our banks, and mad cows with blue tongues, but our top actors can still make hardened New Yorkers cry.

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