Matthew Benjamin writes:
Bloomberg.com: Worldwide: Soon after Bush took office, Greenspan wrote in a new book, it became evident that the Treasury secretary and White House economists would play secondary roles in decisions on taxes and other issues. In addition, officials with whom he had worked in the administration of President Gerald Ford changed after Bush brought them back to Washington, he said he found. "The Bush administration turned out to be very different from the reincarnation of the Ford administration that I had imagined. Now, the political operation was far more dominant," Greenspan, 81, wrote in "The Age of Turbulence: Adventures in a New World."... [Greenspan] recounts his relationships with the six presidents he served. Richard Nixon and Bill Clinton were the most intelligent, he wrote, while he found Ford the most normal and likeable. Ronald Reagan was the most devoted to free markets, though his grasp of economics "wasn't very deep or sophisticated." George H.W. Bush, the current president's father, was very cordial, though Greenspan's relationship with him was complicated by differing views on monetary policy, he wrote. Bush blamed high interest rates, in part, for his 1992 election loss to Clinton.
Greenspan saved his harshest analysis for the current president. Soon after Bush took office in 2001, the president set about implementing a campaign promise to cut taxes, a policy Greenspan said he believed at the time wasn't well conceived. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he wrote. In 2001 testimony before Congress, Greenspan was widely interpreted to have endorsed Bush's proposed tax cuts. In the book, he characterized his testimony as politically careless and said his words were misinterpreted. Greenspan also expressed disappointment in Bush's reluctance to antagonize then-House Speaker Dennis Hastert and other congressional Republicans by vetoing spending bills. "There is a remedy for legislative excess," wrote Greenspan, "it's called a presidential veto."
Greenspan's frustration extended to Congress, which let spending get out of control, he wrote. "'Deficits don't matter,' to my chagrin, became part of the Republicans' rhetoric.... The Republicans in Congress lost their way. They swapped principle for power. They ended up with neither. They deserved to lose."...
When Bush brought one-time Ford aides Cheney -- whom Greenspan describes as having a "sphinxlike calm" -- and Donald Rumsfeld, back to Washington, the Fed chairman saw a "golden opportunity to advance the ideals of effective, fiscally conservative government and free markets." It wasn't to be. "I was soon to see my old friends veer off in unexpected directions," wrote Greenspan, who had been encouraged by the budget surpluses of the Clinton administration. "Then with George Bush came the tax cuts, unmatched by decreased spending, and, in the wake of September 11, still more open- handed spending." Greenspan said he never became part of Bush's inner circle, in which dissent from staff like former Treasury Secretary Paul O'Neill wasn't encouraged. "Paul's outspokenness put him at odds with the administration, which emphasized loyalty and staying on message." The White House just wanted a spokesman for its economic policies, he said...
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