by Rod D. Martin
September 15, 2007
Former Federal Reserve Chairman Alan Greenspan’s very annoying tell-all gets a lot wrong (his allegation that the Iraq war was “all about oil” certain doesn’t show up in the prices we’re paying at the pump, for instance), not least of which his failure to note that he personally caused the tech bust (and the farm bust before it) through really stupid monetary policy (policy, I might add, which quite a few of us rather loudly decried at the time, and for all the right reasons).
On the other hand, to be fair, Greenspan was America’s least-bad Federal Reserve Chairman yet (the jury is still out on Bernanke, but looking better still), and he does hit one note that is particularly important: his continued belief that America faced real deflation in the early part of this decade. This should not count as a brilliant insight — particularly since he caused it — but it does, since most mainstream economists were worrying about inflation the whole time, and since that exact kind of thinking by an earlier Fed produced the decade-long Great Depression (Milton Friedman, you’ll recall, earned his Nobel Prize proving this).
(He also smacks the President and Congress around for spending and says they “deserved to lose” in 2006, which of course is completely true.)
Of course, all of this begs the question: why should a commodity like money be better served by a government monopoly than a commodity like, say steel? Didn’t the Soviet Union’s collapse sweep all that statist thinking away? But unfortunately the answer is no, and so we are now reading this Randian’s memoirs of his time at America’s Gosplan. Such is the way of the world.