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March 08, 2005

Alan Greenspan as Seen by GQ

ABC's "The Note" writes:

[ABC News: The Note: 'Both Hopeful and Precarious':] GQ's Wil Hylton has written a non-loving profile of Fed Chairman Alan Greenspan in which he accuses the Chairman, with some evidence, of being, a, well, a political hack — but not necessarily a partisan one.

Tracing Greenspan's political career from obscure Randian disciple to Nixon economist to Ford political adviser (sort of) to mysterious, Andrea-Mitchell-loving, tennis-playing, naked-bathtub-loving Fed Chair, Hylton suggests that Greenspan's political instincts do not always lend themselves to the advancement of Republican causes.

To wit: Greenspan's famous 'deal' with Bush 41. There's an amusing exchange in the article with Nicholas Brady, who seems to admit that Greenspan agreed to lower interest rates if 'the president would tackle fiscal policy . . . He just plain didn't do what he said he was going to do.' According to Hylton, Brady does a Class A Emergency Dial Back after those remarks.

Fans of the Chairman's will find Hylton's profile to be gosh-darned mean and will probably dispute his account of history, but the article is certain to be be widely e-mailed and widely referenced in the days ahead — after it is released in NY/LA on March 22.

Hylton's account is characterological and eschews an in-depth discussion of policy issues — and certainly doesn't even attempt to answer the question of whether the Chairman has done a good job.

You know, it really wouldn't take much to get us a better press corps--even a much better press corps. Alan Greenspan is not terribly interesting because of his appearance, or because he is a good husband, or for his dress sense, or for the amount of money he has paid. He is interesting because of the policy issues: he has sat in the monetary policy seat since 1987, and has, I would argue, done a superb job on monetary issues and made major missteps since 2000 on fiscal policy issues. To do a profile of Alan Greenspan without an "in-depth discussion of policy issues" as as stupid an enterprise as doing a profile of Martha Stewart without mentioning that she does interior design or doing a profile of Gwyneth Paltrow without mentioning that she acts in movies.

As for Nicholas Brady's belief that Greenspan promised that he would lower interest rates if the Bush I administration took action to curb the deficit and Brady's belief that Greenspan broke his promise.... I can almost see what happened.... Greenspan is extremely unlikely to have ever told anyone that he would lower interest rates below what he thought was appropriate under any circumstances. But Greenspan is very likely to have told all and sundry that action to reduce the deficit--tax increases, entitlement cuts, and discretionary spending caps--would (or was highly likely to) produce an appropriate path for the interest rate that would be lower than if the deficit were left unchecked.

Greenspan would thus have said that the path of interest rates he would be able to choose would be lower if action was taken to reduce the deficit. And Brady would have garbled it and remembered it as the level of interest rates would be lower.

Posted by DeLong at March 8, 2005 06:17 PM