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Alan Greenspan's Autobiography, and His Decision to Switch Political Parties


Thursday, Oct. 04, 2007

As readers may well know, I am a former Republican, turned Independent because he saw for himself that the GOP was not very good at government. It is nice to have such eminent company as former chairman of the Federal Reserve Bank Alan Greenspan. When Greenspan speaks, people truly listen.

Greenspan has spoken at considerable length in his new autobiography, The Age of Turbulence about his years at the Fed. The book's well-reviewed, much-mentioned best-seller status indicates people are once again listening carefully to Greenspan. I sure hope so.

Greenspan describes himself as "a lifelong libertarian Republican." But conservative columnist Robert Novak thinks that Greenspan is, in fact, "a Democrat" because he "loves Bill Clinton … he's dismissive of Ronald Reagan as an amiable putz, [and] he detests the Bushes." Others who have read Greenspan's new work think he is a "Goldwater Republican." Labels are always confusing, if not increasingly meaningless; I call myself a "Goldwater conservative," yet am no longer a Republican.

What we do known is that Greenspan was an effective chairman of the Federal Reserve; that he is a person held in considerable esteem by his peers in the world of monetary and economic policy; and that he does a nice job of explaining both his triumphs and his mistakes in his candid book.

All that said, allow me to call attention to a couple of points in Greenspan's interesting new memoir.

Greenspan Confirms That Republicans Can't Govern the Economy

I am writing this column while out on a book tour with my latest -- Broken Government: How Republican Rule Has Destroyed the Legislative, Executive and Judicial Branches. I have been reading Greenspan's book in airports and on flights, and was surprised to find him explaining therein how Republicans have screwed up the government, not to mention the economy as well. Little wonder Bob Novak called Greenspan a "Democrat," for in today's harsh Republican Party climate, anyone who strays from the official party line is deemed no longer either a conservative or a Republican.

Greenspan bluntly writes that under the Republicans, "[g]overnance has become dangerously dysfunctional." This is the way a central banker says it is broken. (They have their own language, of course - one that Greenspan only occasionally employs, usually to be diplomatic.)

As for the legislative branch under Republican control, Greenspan says succinctly and memorably, "Republicans in Congress lost their way. They swapped principle for power. They ended up with neither.

Greenspan's analysis of the Executive Branch is equally bleak. He reports how Bush and Cheney recklessly squandered the $128 billion federal surplus they inherited, transforming it into a $413 billion (and growing) deficit by fiscal year 2004. It was record-breaking spending profligacy. Greenspan definitively puts the lie to Dick Cheney's claim that "deficits don't matter anymore" by showing their negative impact not only today, but for the future. Greenspan laments that he was unable to get Bush to veto a single Republican spending bill. (He only indirectly notes the fact that the GOP was spending on an ill-conceived war and the fact that they had a domestic plan of buying a permanent GOP majority by spending - two other major contributors to the deficit.)

The former Fed chairman is not a lawyer, so he passes over the judicial branch. However, I could assure him, were he to inquire, that the GOP-dominated federal bench has added its own hurt to our economy in rubberstamping the legislation and executive orders of Republican presidents whenever possible.

The Bain of Corporate Authoritarianism

We should applaud Greenspan for addressing corporate authoritarianism, especially as he is daring to nibble (not exactly bite) the hands that have fed him. He learned of corporate authoritarianism firsthand as a director on countless company boards of directors. He makes no mention, however, of the authoritarianism that has invaded the GOP or of the authoritarian Republican concept that may one day overpower the independence of the Federal Reserve, which he believes essential to our economy: the so-called "unitary executive theory."

Anyone familiar with my research and writing about authoritarianism, as summarized in recent columns such as this one, understands that authoritarian governance - governmental or corporate - is dangerous because leaders seek to avoid accountability and followers do not hold leaders accountable.

Greenspan writes, "Democratic corporate governance [has] morphed into a type of authoritarianism. The CEO would enter the boardroom, explain the corporation's new capital investment program, and turn to his chief financial officer for corroboration. Then, without meaningful deliberation, the board would approve the project. The CEO of a profitable corporation today is given vast powers by the board of directors he essentially appoints."

This has consequences because, as Greenspan explained, this lack of accountability has "spawned abuse." He says, "It was pretty clear during my quarter century on corporate boards that petty abuse was widespread, and on occasion the abuse rose above petty."

In writing about the problems of authoritarianism in government, which appears connected to both the personalities of those who now control the GOP and the fact that so many have come out of the world of big corporations, I have found it difficult to get corporate types to talk about the downside of authoritarianism. However, the process Greenspan describes in the corporate world is not very different from the way our first MBA president runs his White House, and similarly damaging.

Greenspan's Cassandra-like Frustration

Alan Greenspan, who tried to work within the system and among his GOP friends, is brave to have pointed out publicly that they were losing their way. When he failed to get Republicans to maintain "budgetary discipline" - or even make any pretense at doing so - he explained he "knew how Cassandra must have felt." Oh my, do I know what he is talking about.

In Greek mythology, the god Apollo became smitten with Cassandra, so he gave her the gift of prescience. When Cassandra was uninterested in Apollo, he soon placed a curse on her, so no one would believe her insights. Greenspan has at times been prescient, so his Cassandra-like frustration is understandable.

Surprisingly, Greenspan declares that he will vote Republican in 2008. He has made that decision without knowing whom the Republicans might nominate, despite his admiration of the way the Democrats handled fiscal affairs, and notwithstanding his frustration with contemporary GOP economic and monetary policy. In an otherwise insightful book, then, this is about the only really stupid statement.

Greenspan's choice to declare his Party allegiance so early is not only unwise but unfortunate too, because many would listen - as I have discovered - if he used his government experience and knowledge to advise Americans on what is best for everyone, not merely the Republican Party.

Indeed, such a hell-or-high-water stance regarding who should be the next president should be a curse on his prescience, because it suggests an irrationality for which he has not been known.

John W. Dean, a FindLaw columnist, is a former counsel to the president.

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