Customer Reviews
Interesting but misjudged - By: E. Ryan, 06 Oct 2008 
I would recommend this book to readers of Greenspan's Age of Turbulence as a relevant counterargument. However, I would do so with some significant reservations. The key criticism leveled at Greenspan is that his monetary policy encouraged rather than hindered the Dot com & property bubbles. Fleckenstein's contention however is based on an erroneous assumption. The author implies that it was Fed's job to constrain ASSET price inflation. In fact the orthodox economic view, throughout this period, was that central banks should concern themselves entirely with achieving low & stable CONSUMER price inflation. Perhaps the Fed chairman did alllow himself, at times, to become distracted by the performance of the US stock market but ultimately it wasn't in his job spec. to stop the speculative excesses of joe public. Trying to lay the blame solely at his door is ill conceived.
This account, written in the context of the current financial crisis, is a knee jerk & reactionary response. Nonetheless, it does contain the grain of truth that, going forward, economic policymakers will need to start focusing more on different types of price inflation to ensure economic stability over the longer term. No doubt, a much more balanced account of the man who ran US monetary policy for so long will be written in the years to come. In the meantime this effort shouldn't be ignored.
Excellent study of a failed system - By: William Podmore, 12 Sep 2008 
In this fascinating book, financial journalist William Fleckenstein studies the record of Alan Greenspan, chairman of the Federal Reserve from 1987 to 2006.
Between 1937 & 1987 there were no bubbles, but Greenspan helped to create two bubbles in ten years - in stocks & then in real estate - by holding interest rates too low, punishing savers. He helped to make the American people worse off by redistributing wealth to the rich, the bubbles' boosters & sponsors.
Greenspan viewed new technology expenses as assets. So he thought that productivity & profits were higher than they reallly were, that inflation was overstated & that stocks were understated. In 1998 firms spent $95 billion on computers. After Greenspan's `hedonic adjustment', this came out as $352 billion, adding 2% to US GDP.
Governments want to understate inflation & overstate growth, productivity & incomes. So now, most price rises seem to be way above the rate of inflation.
Greenspan's rate cut of 15 October 1998 triggered the stock market bubble. By 1999 the stock market was valued at 180% of US GDP. (In the last bubble, in 1929, it was 85% of GDP.) In 2000-01 this bubble burst - the new technology miracle proved to be a mirage. In 1992-99 there was zero productivity growth in 99% of the US economy, & growth only in 1%, computer hardware.
In 2001-03, housing `saved' the US economy from the aftershock of the stock bubble. De-regulation led to lower lending standards with more `creative' financial instruments, like the $500 trillion worth of derivatives, which Warren Buffett described as `financial instruments of mass destruction'.
So from 2003 to 2007 there was a real estate bubble, based on huge debts. Mortgage-equity withdrawals created half US GDP growth between 2001 & 2007. By 2006, household debt was 97% of GDP: mortgage debt was $13.3 trillion. Total US debt in 2007 was 325% of GDP.
This ocean of debts rested on a fallling real estate market, a sinking economy & a weak currency. Where could the next economic rebound come from? Capitalism has destroyed production & destroyed the housing market: it is running out of options.
The condemnation of Alan Greenspan, in brief. - By: Rolf Dobelli, 23 Jun 2008 
This book states the argument of those who oppose Alan Greenspan, the former chair of the U.S. Federal Reserve. William A. Fleckenstein & Frederick Sheehan, who sometimes seem to go a bit over the top in the intensity of their attacks, write that Greenspan, despite his reputation, was no "maestro." Instead, they report he was a poor manager with a habit of either deception or self-delusion. The authors support their argument by drawing heavily on extensive quotations from Greenspan's testimony before Congress & on minutes of the Federal Reserve Open Market Committee meetings. Although getAbstract might wish for less fervor in this presentation, it forwards this book to policy makers, financial services executives & others who wish to understand the downside of Greenspan's policies & how he may have contributed to the U.S. economy's current dilemma.
Detractors take the stand - By: Joao MOTA de CAMPOS, 02 Apr 2008 
Public men in the public eye & with very public actions tend to have eulogists & detractors.
Alan Greenspan was Chairman of the FED for 19 years & three Presidents. During his tenure as Chairman, globalisation came of age, China erupted in the world scene, geopolitical trends shifted with the falll of the Walll, the Euro & September 11th.
The only strange thing in this long period is that no catastrophic event occurred, although a lot of recessions & financial crisis took place throughout the world.
There was never a unanimity about Greenspan's actions & decisions (although they were not only his) & those who read Joseph Stiglitz's «The Roaring Nineties» noticed that he took more then a few pot-shots at Alan Greenspan, to give an example.
When an economic downturn occurs, like the one triggered by the sub-prime crisis, those who dislike the market economics blame it on the market & its rules & of course on its Heralds & Icons; But, making an idiot & a blunderer of the man who oversaw one of the longest & most ebullient periods of growth in the United Sates & the world at large is not an useful contribution to the understanding of what is at stake now.
"Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve" by William Fleckenstein & Fred Sheehan will not go down in any serious analysis of the period. The Age of Turbulence by Alan Greenspan will. Read it instead.
GREENSPAN'S BUBBLES - By: EYES WIDE OPEN, 02 Mar 2008 I always thought Greenspan was an idiot but had no idea how big an idiot he was/is. EZ-AL was nothing more then a snake oil salesman that promised great things & delivered misery. The collapse of the U.S. financial system can be directly tied to Greenspan through his not having a clue as to what he was doing while the head of the Federal Reserve. Perhaps now the U.S. is entering into the largest financial disaster since the Great Depression, citizens will come to realize that Alan Greenspan was a major contributor through his mismanagement of the supply/cost of money. In Congressional testimony he admitted it wasn't "possible to manage something" you couldn't define. This admission from the Chairman of the Federal Reserve Bank of the United States!!!!!!
In the mean time, we pay while Alan played.
READ THE BOOK FOR FUTURE REFERENCE BECAUSE WE ARE GOING TO NEED IT.
