Book Review of Panderer to Power, by Frederick Sheehan. McGraw-Hill: New York, 2010. Retail: $29.95
For the bulk of my life so far, I have lived in the age of Alan Greenspan, the chairman of the Federal Reserve Bank from 1987 to 2006. Mentioning a Federal Reserve chair like this in the past would not have been considered normal, yet Mr. Greenspan has a sort of legendary status associated with him. Well, at least some people consider him to be an iconic figure, but more and more the general public is coming to realize the destructive effect he has had on the world economy. Books like Frederick Sheehan’s Panderer to Power have something to do with the dispelling of the myth.
Sheehan’s book is the first critical, post-crash biography of Greenspan. Using Greenspan’s own words, Sheehan tracks Greenspan’s education as a young man, early professional life, his meteoric rise to stardom as a celebrity figure, and his tenure as Federal Reserve chair. The questions primarily raised are: What kind of man is this who has so much power over the world, and what did he do that has led us to today’s economic crisis? The answers are quite surprising. Here are some of the things I learned about Greenspan.
- Greenspan was supposedly a disciple of Ayn Rand, yet he probably did not understand what Rand generally was talking about. Nathaniel Branden wrote later, “I wondered to what extent he was aware of Rand’s opinions.” Apparently, he would even argue the question of his own existence with the objectivist coterie. Rand herself wondered, “Do you think Alan might basically be a social climber?”
- Even in his pre-Fed years, Greenspan was actually a rather mediocre economist and forecaster. Time after time he would make highly-publicized predictions and yet the exact opposite would occur (see pages 43, 54, and chapter 7).
- Greenspan was a master self-marketer, which is probably the reason for his rise to stardom. He constantly engaged the media and the New York financier social scene, hence he had everyone’s ear without the wisdom to back it up. How else can you be both a professional economist and yet date Barbara Walters?
- Even though Greenspan has supposedly had a historically apolitical career, he was a master politician (read: liar). One only need look to his involvement during the Nixon and Carter presidencies to realize that he knew how to play the political game brilliantly.
- Greenspan’s policies during his Fed years were incredibly political as well. He frequently timed his actions in accordance with what was politically expedient. Wall Street and the fat cat Congress could count on the legendary “Greenspan Put” to be their savior when things were looking down.
- Post-crash, Greenspan has tried to play his own game of historical revisionism about his policies that led to the economic crisis. Sheehan exposes these and many other lies.
- Greenspan has been hired as a consultant by many of the firms who profited from the economic crisis via government handouts. Go figure, the man who enriches Wall Street and causes the meltdown gets the extra paycheck…
Clearly, there is much yet to learn about the man whom many called “the second-most powerful man in the world” for nearly twenty years.
In summary, Sheehan’s retrospective on Greenspan is a fascinating read, and I anticipate it will become a valued resource for those looking to understand the Greenspan years from a perspective that offers more than tacit approval of inflationism and government intervention in the economy. Keep in mind, though, it is not an easy read. Economics is discussed at a fairly high, but understandable level. You will probably end up like me, referring to Wikipedia and other sources to recall certain investment and econ topics. Nevertheless, Panderer to Power is worth your time if you desire more knowledge about the Greenspan legacy.
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Visit Frederick Sheehan’s website.