I make no bones about the fact that I liked Alan Greenspan better as Fed chairman than as ex-Fed chairman. His comments in the past year haven’t helped and his book smacked of … well, smack. I’m not na?ve; I understand the publicity machine prior to a book release, but frankly some of it was beneath the dignity of a man who otherwise exudes dignity.
But I will absolutely back him on his defense of his legacy. Few voices were raised in protest during his tenure (Sen. Jim Bunning R-Ky being the exception, but I believe he was wrong then just as he is now). Fed policy is always about trade-offs and the calls he made, while never perfect, were as good as we could get. I agree there was little the Fed could do to avoid the current crisis without doing greater harm to the economy at large.
“I was praised for things I didn’t do,” Greenspan told the Wall Street Journal. “I am now being blamed for things that I didn’t do.”
You’ll never please everyone, especially in monetary policy. A laissez-faire approach is what’s required from a free-market central banker, and ultimately he did it right.