Greenspan bashes Bush in new book / LJWorld.com

Archive for Sunday, September 16, 2007

By Jeannine Aversa and Ann Sanner - Associated Press Writers

September 16, 2007

Washington — Former Federal Reserve Chairman Alan Greenspan, in his new book, bashes President Bush for not responsibly handling the nation's spending and racking up big budget deficits.

A self-described "libertarian Republican," Greenspan takes his own party to task for forsaking conservative principles that favor small government.

"My biggest frustration remained the president's unwillingness to wield his veto against out-of-control spending," Greenspan wrote.

And he weighed in briefly but pointedly on the Iraq war: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Bush took office in 2001, the last time the government produced a budget surplus. Every year after that, the government has been in the red. In 2004, the deficit swelled to a record $413 billion.

"The Republicans in Congress lost their way," Greenspan wrote. "They swapped principle for power. They ended up with neither. They deserved to lose."

In 2006, voters put Democrats in charge of Congress for the first time in a dozen years.

Greenspan's memoir, "The Age of Turbulence: Adventures in a New World," is scheduled for release Monday. The Associated Press purchased a copy Saturday at a retailer in the Washington area.

The book is a recollection of his life and his time as Fed chief.

Greenspan, 81, ran the Fed for 18 1/2 years and was the second-longest serving chief. He served under four presidents, starting with his initial nomination by Ronald Reagan.

He says he began to write the book Feb. 1, 2006, the day his successor - Ben Bernanke - took over. A caption under a photo of Bernanke's swearing-in has Greenspan saying he was "very comfortable leaving the post in the hands of such an experienced successor."

The ex-Fed chief writes that he regrets the loss of fiscal discipline under Bush.

Greenspan long has argued that persistent budget deficits pose a danger to the economy over the long run.

At the Fed, he repeatedly urged Congress to put back in place a budget mechanism that requires any new spending increases or tax cuts to be offset by spending reductions or tax increases.

Large projected surpluses were the basis for Bush's $1.35 trillion, 10-year tax cut approved in the summer of 2001.

Budget experts projected the government would run a whopping $5.6 trillion worth of surpluses over the subsequent decade after the cuts. Those surpluses, the basis for Bush's campaign promises of a tax cut, never materialized.

"In the revised world of growing deficits, the goals were no longer entirely appropriate," Greenspan noted. Bush, he said, stuck with his campaign promises anyway. "Most troubling to me was the readiness of both Congress and the administration to abandon fiscal discipline."

Greenspan, in testimony before Congress in 2001, gave a major boost to Bush's tax-cut plan, irking Democrats.

He argued then that a tax cut could help the economy deal with sagging growth. The economy slipped into a recession in March 2001. The downturn ended in November of that year.

Discussion

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16 September 2007
at 10:19 a.m.

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smitty (Anonymous) says…

Editorial **Bash Bush** interpets to facts on why Greenspan lost faith in the republicans in congress.
16 September 2007
at 10:41 a.m.

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kugrad (Anonymous) says…

Bush is the one who has given multiple rationales for the war in Iraq, none of which have included perhaps the primary rationale, US interests in oil in the region. This is very “inconvenient” for Bush, as it is difficult to portray a war started without provocation that largely seeks to secure, if not control, one of the globe's major oil supplies, as anything less than a war of agression.
The sad thing is that many ordinary Americans still believe the war in Iraq was part of a “War on Terror.”
16 September 2007
at 11:09 a.m.

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mick (Anonymous) says…

“i was campaigning in Chicago one time and a fellow said, would you ever allow for deficit spending, would that ever enter your vocabulary? I said, well under circumstances: only if we're at war or there was a national emergency or there was a recession. Little did I realize we'd draw the trifecta.” Bush, Mar 27. 2002 luncheon. Ha ha ha ha ha. Now the dollar is down 40% against the Euro since Bu**sh** took office and our economy is a slow-motion train wreck.
16 September 2007
at 1:57 p.m.

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situveux1 (Anonymous) says…

Well, the descriptive word bash may be a little over the top…but not having read the book I don't know. I do know that what he said was dead on…Republican's swapped responsibility for money and power, no doubt about that. On the basis of spending, he's right, they deserved to loose.
16 September 2007
at 2:20 p.m.

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gccs14r (Anonymous) says…

Greenspan had a hand in screwing us over, too, by increasing M3 by 10% per year for a decade. Bernanke has continued the practice and the situation with liquidity saturation has become so bad, the Fed has quit publishing M3 figures (apparently hoping that no one would notice). With the money supply so high, the only way to keep foreign investors interested in the dollar is to raise interest rates, but instead the Fed is thinking about lowering them, which should cause other central banks to reduce their holdings. When the Chinese finally unload their dollars, it's all over for the U.S. economy.
16 September 2007
at 3:32 p.m.

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Godot (Anonymous) says…

Why does Greenspan find it necessary to state that the subprime mess is not his fault? Sounds like guilt is speaking there. Some enterprising journalist should do a little digging.
16 September 2007
at 5:21 p.m.

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Godot (Anonymous) says…

” Some experts say hedge funds are big enough to destabilize markets and must be understood by regulators. Others, including U.S. Federal Reserve Chairman Alan Greenspan, say hedge funds provide a critical source of liquidity for the markets, and they advise against too much intrusion on the business. ”

That quote is taken from the closing paragraphs of this scathing report on the sleaziness and potential for disaster posed by the unregulated hedge funds. This Forbes article is dated 5/24/2004.

http://www.forbes.com/global/2004/052…

16 September 2007
at 5:21 p.m.

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Godot (Anonymous) says…

Mr Greenspan, watch the length of your nose.
16 September 2007
at 5:27 p.m.

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Godot (Anonymous) says…

http://www.federalreserve.gov/boarddo…

amd

http://en.wikipedia.org/wiki/When_Gen…
16 September 2007
at 7:31 p.m.

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Godot (Anonymous) says…

Twenty years of unmonitored rule over our monetary system by one person who appears to have been, at the kindest, asleep at the wheel, is a tenure that is definitely too long.
16 September 2007
at 7:50 p.m.

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50YearResident (Anonymous) says…

Eight years of a president that attacked a country without just cause is more than enough.
16 September 2007
at 9:26 p.m.

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kugrad (Anonymous) says…

Godot and Rightnonthinker, I know it just kills you to have such a reputable person bash your favorite president, but Greenspan did a fantastic job and everyone (but you two) knows it.
Godot, Greenspan hasn't gone out of his way to say the subprime mess was not his fault. In fact, just this week he took some responsibility for it (and 'some' is all he should take) noting that he “did not see it coming.”