Warning: Geeky post ahead, though this is what makes more than half of my life (which just means its part of my job :P).
A few years after ordering the book, I finally read Alan Greenspan's autobiography titled 'The Age of Turbulence'. Greenspan has, without a doubt been one of the most powerful people to have shaped the financial world, for good or bad, over the past couple of decades. Hailed by few as a genius who turned USA into the great stabilizing force it is today, and blamed by others for the financial crisis, people view him at extremes.
|Alan Geenspan: The man who knew everything, or nothing?|
During one of my corporate training programs, one instructor mentioned about Greenspan, and spoke very highly of him (that was before the financial crisis). To him, here was the greatest fed chief ever, and to look at history, he didn't do bad either. During his time, US grew in strength, the economy expanded, and inflation was under control. However, soon after he left, the world economy just fell off a cliff - and for which he must share a part of the blame. However, throughout human history, we have had bubbles and bust, and there is only much we can do before it actually happened. Its like a gold rush, when people have to go, they have to go. No amount of persuasion from anyone, least of them the fed chairman, would convince them otherwise.
For all those interested in recent history of world economics, right from the early 70s, till the early past of 21st century, its a great read. He describes his time under different presidents, the economy then, and most importantly, the mood/thinking of the powerful men then. Greenspan describes his time with all the presidents who assumed office, and how each one differed from others in terms of policies and priorities. Towards the end, he briefly touches upon his vision for the future of different economies, though much of it is useless now given post the recession things have changed. He sees very bright future for the Asian emerging countries, notably China, and to a much smaller extent India and Russia (whats so different you may wonder, this is exactly what every media has been preaching. But there is a difference, and he has clearly separated India from China, who in reality too are not comparable, at least at this point of time).
The book may change my views on economics a little bit, and shattered a few of my long held beliefs:
1. USA didn't have prosperity since a long long time. Only over last couple of decades they have had a great run in economy. I had always assumed they had a good life for last several decades.
2. The low interest rates in USA haven't been always that way, and they too had double digit inflation in 70s. Gives me some hope about state of things in India as well.
3. People have completely mis read the financial markets in proclaiming equities beat bonds over the long run. 80s and 90s were great period of growth for US, and very low interest rates. It was only during this period that much of financial theory was developed, and hence its quite flawed. A great many factors came together for that to happen, not the least the once in a lifetime event of globalization (which moved low skilled jobs offshore, hence containing any significant wage rise, leading to low inflation and high corporate profits).
4. Inflation is the biggest enemy of a nation, and if the central bank can rein it, rest all will fall in place. Greenspan has stated this time and again, and history has proved him right. To some extent, even our current RBI chief, holds a similar view, and is doing everything possible to keep inflation in check.