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[No Comment]

Greenspan’s Judgment


They’ve come as a steady trickle since the first years of the Bush Administration: insiders leave and publish accounts telling us that deep inside the White House there’s a frightening show. The principal themes to emerge are cynical manipulation of national security for partisan political reasons, infidelity to traditional conservative values, insatiable thirst for power, mendacity and a general and far-reaching incompetence. The first of these was Richard Clarke, he was quickly followed by Paul O’Neill and a raft of others.

Now as the release date of his memoirs approaches, it appears that Alan Greenspan, the conservative icon who ran the Federal Reserve system during the nation’s glory days of economic success—the nineties and into the first years of Bush—will have a harsher judgment to pass than his predecessors.

Forbes reports on the Greenspan book:

Bush ignored his advice to veto “out-of-control” bills that sent the U.S. deeper into deficit. “Little value was placed on rigorous economic policy debate or the weighing of long-term consequences,” he writes of the Bush administration. The Republicans deserved to lose control of Congress in last year’s elections, Greenspan writes in The Age of Turbulence: Adventures in a New World, to be published on Sept. 17. He charges that Republicans in Congress “swapped principle for power” and “ended up with neither”.

Greenspan said he never became part of Bush’s inner circle, in which dissent from staff wasn’t encouraged, and that his hopes that the Bush administration would become a “reincarnation” of the fiscally conservative Ford administration never materialized. But despite differences over economic policy, Greenspan said the president kept a promise not to interfere with Fed policy.

In fact, Greenspan is clear: of the six presidents under whom he served, he ranks George W. Bush dead last. He harbored hopes that Bush would adopt the fiscally prudent policies of Gerald Ford—but it became obvious that that was not happening when Bush and the Republican Congress fell in love with ear-marking and pork-barrel spending at levels that had never been seen before.

Still the most disturbing piece of the Greenspan book may be his discussion of the Iraq war. According to a rather sensationalized report in this morning’s Times (London), Greenspan says that the claims that the Iraq War was about weapons of mass destruction were always a deception. The war was planned and fought to protect American interests in Gulf oil, and to extend those interests into Iraq:

However, it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” he says. Greenspan, 81, is understood to believe that Saddam Hussein posed a threat to the security of oil supplies in the Middle East.

This immediately brings to mind Paul O’Neill’s similar suspicions—including his reminder of Dick Cheney’s dismissal of admonitions of the need for fiscal prudence during cabinet meetings, and his discovery one day of Cheney amid maps of the Iraq oilfields, which he appeared to be dividing up for foreign development.

It’s clear that the voice of fiscal prudence—the voice of O’Neill and Greenspan, for instance—was relegated to the corner by Bush. They were necessary to give the market some comfort, but they could not influence key issues surrounding federal spending.

And the consensus view that O’Neill and Greenspan seem to share—that the Iraq War was essentially an oil grab—allows us to view some other developments in Iraq in a different context. For instance, the successful deal struck by the loyal Bushies at Hunt Oil for the Kurdish fields.

I am eager to see how National Review, the Weekly Standard and The Wall Street Journal editorial page cope with Greenspan. Will he suddenly be transformed into just another lefty loon? The question here is betrayal of conservative values. It’s obvious to any careful observer that they were betrayed, and that the media which claim to uphold those values in fact have been so coopted by unalloyed partisanship that they no longer do.

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