Khaki On Broken Wings

“Exceptional . . . Deeply researched and elegantly written . . . As a description of the politics and pressures under which modern independent central banking has to operate the book is incomparable.” —Financial Times The definitive biography of the most important economic statesman of our time Sebastian Mallabys magisterial biography of Alan Greenspan the product of over five years of research based on untrammeled access to his subject and his closest professional and personal intimates brings into vivid focus the mysterious point where the government and the economy meet. To understand Greenspans story is to see the economic and political landscape of our time—and the presidency from Reagan to George W. Bush—in a whole new light. As the most influential economic statesman of his age Greenspan spent a lifetime grappling with a momentous shift the transformation of finance from the fixed and regulated system of the postwar era to the freeforall of the past quarter century. The story of Greenspan is also the story of the making of modern finance for good and for ill. Greenspans life is a quintessential American success story raised by a single mother in the Jewish émigré community of Washington Heights he was a math prodigy who found a niche as a statscrunching consultant. A master at explaining the economic weather to captains of industry he translated that skill into advising Richard Nixon in his 1968 campaign. This led to a perch on the White House Council of Economic Advisers and then to a dazzling array of business and government roles from which the path to the Fed was relatively clear. A firebreathing libertarian and disciple of Ayn Rand in his youth who once called the Feds creation a historic mistake Mallaby shows how Greenspan reinvented himself as a pragmatist once in power. In his analysis and in his core mission of keeping inflation in check he was a maestro indeed and hailed as such. At his retirement in 2006 he was lauded as the ages necessary man the veritable God in the machine the global economys avatar. His memoirs sold for record sums to publishers around the world. But then came 2008. Mallabys story lands with both feet on the great crash which did so much to damage Alan Greenspans reputation. Mallaby argues that the conventional wisdom is off base Greenspan wasnt a naïve ideologue who believed greater regulation was unnecessary. He had pressed for greater regulation of some key areas of finance over the years and had gotten nowhere. To argue that he didnt know the risks in irrational markets is to miss the point. He knew more than almost anyone the question is why he didnt act and whether anyone else could or would have. A close reading of Greenspans life provides fascinating answers to these questions answers whose lessons we would do well to heed. Because perhaps Mallabys greatest lesson is that economic statesmanship like political statesmanship is the art of the possible. The Man Who Knew is a searching reckoning with what exactly comprised the art and the possible in the career of Alan Greenspan.