Books: US's great interventionist

Federal Reserve chairman Alan Greenspan stayed on top for so long thanks to his activist approach and wide contacts. DeAnne Julius reviews a crisp autobiography. Review by DeAnne Julius.

Alan Greenspan's autobiography is a 'three for the price of one' bargain: it's a personal memoir, an economic history and a policy primer. The writing is crisp and the book reads like a conversation with a lead protagonist previously visible only from afar.

The personal-memoir chapters are an engaging romp through the life of an only child in an extended family where music and baseball were shared passions. After the war, Greenspan parlayed his facility with maths into early jobs at the economic coalface. He studied housing starts and the new-car market. He was an early user of econometrics, with both an appreciation for and a scepticism toward model-based forecasts. His later work for industrial clients and as a non-exec director on many boards deepened his knowledge of the economy's inner workings. Greenspan had a more thorough apprenticeship for his job as the Federal Reserve Board's chairman than any central banker before or since.

The meatiest sections of the book relate to Greenspan's time in Washington, initially as chairman of the Council of Economic Advisors in 1974. His Senate confirmation hearing was on the day Nixon resigned. Fortunately, he and the new president Gerald Ford got on well. They agreed that inflation was the number one problem and that dismantling the Nixon-era price and wage controls was part of the solution. As CEA chairman, Greenspan was involved in the full range of economic policy issues and discovered that 'being at the center of things was admittedly fun'. Perhaps this laid the groundwork for the close relationships he cultivated later as Fed chairman with the presidents and treasury secretaries with whom he served.

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