The Age of Turbulence by Alan Greenspan

The long awaited memoir entitled "The Age of Turbulence: Adventure in a New World" by Alan Greenspan, the former Chairman of the Federal Reserve Board appointed by US President, Ronald Reagan, is finally out. He is coined "The Maestro" by Bob Woodward, the famous reporter who uncovered the Watergate scandal. When he was the Federal Reserve Board Chairman, every word he uttered may create serious implications and consequences directly or indirectly towards the economy. Hence it was very difficult to gauge his thinking and opinions on the issues of the economy. Of course, the interest are about his revelations about the world before and after September 11 2001, and describes his experience passing through each economic crisis, for example, Black Monday, collapse of Long Term Capital Management and the dot.com bust. He also offers his insights what the world would look like in the near future. Of course, if you purchase the book in Asia (like I made my purchase in Singapore), you get a special Asian edition, where he has written an additional preface on the Asian economy. Here are my thoughts after reading most parts of the book.

For a memoir, it is definitely well written and interesting that gets me hooked for a few days. For that matter, even the way the description of his first date with his current wife, Andrea Mitchell, a foreign correspondent from MSNBC was amazing. Imagine that Alan Greenspan brought his girlfriend for a first date back home and charmed her with his own essay about anti-trust for Ayn Rand. I doubt that many of us can do that. Of course, that small snippet in the book is not what makes it interesting. I also respectfully disagree with Bob Novak's assessment of his book in Bloomberg's Political Capital with Al Hunt, where he said that it did not appear to him that it was a memoir. From reading the book, Greenspan followed the standard autobiographical approach, with the backdrop of September 11, which he thought was the event that changed the world, then started moving the clock back to his childhood, his training as an economist and subsequently, his job as the Fed Chairman.

You can tell from the early beginnings of the book, one of the main characters who offered a major intellectual challenge to him was Ayn Rand, a famous philosopher for her libertarian and objectivism views. Subsequently, he talked about how he completed his PhD in economics and got involved with government. If you are not an economist, you might be intimidated by the various concepts which he brought up earlier in the book and he did his best to explain them in the simplest manner possible. If you are an economist, you may appreciate the book better because it also underlies how the different philosophies of Keynes and Schumpeter have influenced his views about the economy. I was amused by his sarcasm that Bill Clinton was the best "Republican" president that he has ever met. In his view, both Nixon and Clinton were the two most intelligent US Presidents and yet the irony is that with brilliance comes their dark sides. Of course, he made the wise choice of not entering into the Nixon administration as he has the foresight (from his recollection of Nixon before the general election) that he won't want to serve someone who hated everyone including his own Secretary of State, Henry Kissinger. A lot on Greenspan's early career have been interwined with politics and economics. One interesting tale in politics for Greenspan described his attempt with Kissinger to convince Gerald Ford (who lost the election to Carter in 1976) to be the running vice-president to Ronald Reagan, which did not work out and the eventual nomination went to George H W Bush.

In Alan Greenspan's world, he relied on the use of formal mathematical models coupled with a set of assumptions that can be identified with data and issue-specific. It does offer us a glimpse on how he sets up his analysis of the world for his career later. For those who don't know, Greenspan is one of the followers of the Wittgenstein school of logical positivism. It was till the part when he was offered the job of Fed Chairman, the book shifted gears and you start to feel the action going from there to the end. Here is the part which I do not want to spoil the reader and leave you to discover why this book has taught me more than what I expected on the US economy and the forces of globalization. Till the end, Greenspan offered his own delphic vision of the future and parted with an interesting note that the predictions he made may go wrong. He correctly noted that in the end, it is the human perseverance and ability to adapt that will be able to solve the problems of that time.

Related Links:

• Alan Greenspan's Amazon Blog on "The Age of Turbulence"