No wonder they call him the Maestro. A review by Bob Woodward in the Washington Post and interviews with the New York Times, Wall Street Journal, Financial Times and "60 Minutes" accompanied the release on Monday of Alan Greenspan's memoir, "The Age of Turbulence: Adventures in a New World." And even though Carolyn Baum's skeptical Bloomberg review reports that there is not much that's newsworthy in a light and breezy read, the financial press has been treating Greenspan's slam on George Bush and his acknowledgment that, yes, there was a housing bubble, like starving sharks going after bloody chum.
The econo-blogosphere, as one might predict, is in a frenzy. For minute-by-minute coverage, Mark Thoma and Felix Salmon are your best Greenspan aggregators. Dean Baker is reliably scathing. Brad DeLong is doing double-duty, blogging and reviewing the book in the dead tree press at the L.A. Times.
Out of all the coverage, my favorite snippet comes by way of an interview with Krishna Guha in the Financial Times.
Mr Greenspan is more certain than ever before that central banks should not try to burst bubbles once they begin to inflate. "I am coming to the conclusion that bubbles are inevitable," he says. "Human beings cannot avoid them ... They cannot learn."
More ions than anyone can count have already been spilled over the question of whether Greenspan's easy money policy of the early 2000s kicked off the housing boom. That won't be settled here. But the change in rhetoric -- for a long time, Greenspan avoided using the word "bubble" to describe what was happening to the real estate market in the U.S. on his watch, but now he says that when he talked about "froth," he really meant bubble -- is being treated as an earthshaking event.
Whatever. A year ago, he told us "the worst was probably over" for the housing bust. He was about as wrong as one could possibly be.
But he sure seems to be right about the humans never learning part. For two decades Wall Street and the financial press have hung on every word the man breathes, treating each utterance as an infallible proclamation from the pope.
One could make a case for such reverence during his 18-year term as chairman of the Federal Reserve Bank. But the spectacle is a little less compelling when the job at hand is a public relations campaign aimed at selling enough copies of a book to earn back a rumored $8 million advance.
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