Greenspan, Alan. The Age of Turbulence: Adventures in a New World. New York: Penguin, 2007.

     “Irrational exuberance,” he called. Irrational exuberance? Those were the words of Federal Reserve Chairman Alan Greenspan in public testimony in the late 1990s concerning the huge economic growth experienced in the United States during the so-called “dot com bubble.” What is a “bubble?” And what did Greenspan mean and how does he figure as a significant figure in post-World War II US history? And what does the Federal Reserve actually do, anyway?

     In Greenspan’s 2007 autobiography, The Age of Turbulence, he touched in brief on his childhood as a city kid raised by his divorced mother. Greenspan’s account of a life focused on numbers and statistics does tell some interesting anecdotes about his social diversions away from facts and figures and the “soft” science of economics; for example, Greenspan’s passion for playing jazz orchestra in his high school and college age years, and of course, his participation in New York intellectual salon of Any Rand.

     Greenspan served as Federal Reserve (commonly called the “Fed”) Chairman from 1987 to 2005, and for 18 year’s what he said and what he thought could make Wall Street, Frankfurt, Tokyo and London’s “City” make or lose tens of billions of dollars in a single day. As Fed Chairman, Greenspan had only one of numerous votes with Fed Governors on setting key interest rates in the US–short term loans to major banks and government bonds to finance over-spending. With these “influences” of raising or lowering the rates on loans, the Fed intervenes on markets via manipulating money, and the perceived “value” of money as a unit of currency. Doing this provides “stability” to markets and prevents disaster. A semi-independent agency in the US Government, the Fed was created by an act of Congress, and as such is a creature of the will of the people, in theory.

     Technically, the Chairman writes the agenda of the Fed Board and runs the meetings. More than just any banker, Greenspan might one day be considered the intellectual and philosophical giant of capitalism and wealth creation.

     In his memoir’s Greenspan devotes a few pages to his time around Rand and her friends, commenting mostly on drinking parties and esoteric intellectual debates. But the Rand clique’s influence on Greenspan is seen in his subsequent career as a top-tier corporate economic consultant with his own small firm, his involvement with the Ford Administration as President of the Council of Economic Advisor’s, and his towering authority during his Fed career, and the year’s since (often overshadowing the comments of his successor, Ben Bernanke).

     Greenspan certainly credits the Rand clique with reinforcing, often through Rand’s iron-clad, insidious logic in one-on-one debates, his views about the nature of personal liberty and economic freedom. Rand, a Russian Revolutionary-era emigre who spent youth and part of adulthood in first a czarist then a Bolshevik dictatorship, may have been a moral relativist, but she certainly stands out as one of the most quoted and admired (not by this author) “absolutist libertarian” philosophers in the last three hundred years.

     Greenspan’s own views throughout the book definitely show his belief and action that the combination of personal choice in decision-making and the freedom to use choice in economic decision-making is the best way to grow wealth in a market economy. The growth of the US economy during Greenspan’s 18 year as chief central banker certainly testify to the effects, both of good boom and bad bust, of government with the discipline to not interfere too much in a nation’s economy, eliminate deficits to expand the availability of money for private enterprise, and reduce the long-term debt. These actions during a time of technological revolution during Clinton’s Administration exploded the gross domestic product (the sum of goods and services produced in a country). The economic growth–the capital accumulation, government surpluses, and job creation–spurred rapid growth, and then created a train broiling ahead with greater and greater momentum.

     As always happens in boom times, people with little knowledge of investing fueled the train with more money (capital accumulation). Hence, the description of “irrational exuberance” was both a reckless p.r. disaster but an apt description of a country’s citizens out to get the “easy money.” Because of the laws of supply and demand in a liberal market, the train abruptly ran out of track. Before catastrophe, Greenspan put on the brakes. All was well. Investors who knew what they were doing did fine. Others who didn’t, did not.

     So, is a capitalist market a “free-market,” as Greenspan (and others) insist it is? Do not governments create things like the Federal Reserve to regulate them, at least a little? If so, does that necessarily translate into personal political liberty or social equal opportunity? Or, does it take money to make money. All are wrong who argue that certain economic status gives people the advantage over the rest of society in their educational and career opportunities. Where people take it from there is up to them. To maintain a relative minority class requires only the benefits of money influence on government. However, skill and ability, and hard work still matter in America. But are we going down a track in a political-economy so corrupt, so bought? These should be “inside the text” questions raised in reading Greenspan’s book. The answers may enlighten people as to what a country of a real free-market and all free-minds would look like.