Wednesday, June 30, 2010

Book Review (#7 of 2010)

The Age of Turbulence: Adventures in a New World by Alan Greenspan.

Audio. This massive tome is actually two books in one. The first is his autobiography, a great look at his career and his views of several White Houses. I found most interesting how his own thoughts contradicted Bob Woodward's late 90's account, Maestro, which I read in college. I remember Woodward writing that Greenspan was complimentary of George H.W. Bush's knowledge of economics via his Yale degree. Greenspan isn't very complimentary of Bush '41 in his own memoir, and calls Nixon and Clinton the smartest presidents he ever knew (he's extremely complimentary of Clinton).

The second book is basically composed of essays ranging from the history of economic thought to his views on Latin America, Russia, India, and China, to his predictions of the coming decades. It's this part that Greenspan's book fell flat to critics. Greenspan doesn't forsee any financial crisis, and sees inflation in 2008 as the biggest potential threat. Here's the guy credited with seeing so much and yet he clearly saw so little.

Greenspan thinks that the benefits of government housing policies (subsidizing mortgages, tax breaks, etc.) outweigh the risks (which he viewed as rather minimal). Not sure if he's changed his tune, but recent Congressional testimony illustrated that he'd changed his tune about his confidence in market players to regulate themselves and avoid taking on too much risk.

In all, this book is too verbose. His economic writings are fantastic for a student who wants an intro into basic economics & finance, but his thoughts are quite droll by the end when he delves into climate change, and other things he knows little about. Given the gravity of the approaching crisis when the book was published in 2007, it's hard to take some of his feigned expertise seriously.

3.5 stars out of 5.

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