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This book is in part a detective story. After 9/11 I knew, if I needed further reinforcement, that we are living in a new world — the world of a global capitalist economy that is vastly more flexible, resilient, open, self-correcting, and fast-changing than it was even a quarter of a century earlier. It's a world that presents us with enormous new possibilities but also enormous new challenges. The Age of Turbulence is my attempt to understand the nature of this new world: how we got here, what we're living through, and what lies over the horizon, for good and for ill.
The first half is my effort to retrace the arc of my learning curve, and the second half is a more objective effort to use this as a foundation on which to erect a conceptual framework for understanding the new global economy.
I don't pretend to know all the answers. But from my vantage point at the Federal Reserve, I had privileged access to the best that had been thought and said on a wide range of subjects. I have not been inhibited in reaching for some fairly sweeping hypotheses.
2007 Nov 26
The Age of Turbulence: Adventures in a New World
Summary:
If you've read this one, please share your thoughts.
Did you enjoy it? Is it well-written? Is the subject matter interesting?
Does the writing style have particular strengths (or weaknesses)?
One of the things various people have said over the years about Alan Greenspan is that he tends to underestimate his own influence. Reading his book, I think I'm seeing that too. For example, in the introduction, he relates how after 9/11 he made a speech that put a brave face on things, saying that the economy had become resiliant to shocks, but he didn't fully believe it and didn't expect he was fooling anyone. Then he turned out to be right: the economy recovered relatively quickly. It's obvious to me that at least part of the reason the economy recovered so quickly is because Greenspan suggested that it would. People believed (correctly, in my opinion) that he was the leading economics expert in the world, and so when he made positive statements, that gave people confidence, which generally has a lifting effect on the economy. Another example: barely a page later, he relates that after a meeting with lawmakers, he went home thinking all he'd done was reinforce what the lawmakers were already thinking, but the press acted like it was his agreement that made the whole thing happen. Well, it probably was. Apparently the lawmakers in question actually believe that the Chairman of the Fed is some kind of expert on economics, and if he agrees with what they're thinking, that gives them the confidence to go forward with it, and if he has reservations (as at the previous meeting) they hesitate (as they did). So now when out of retirement he comes out with a book saying that we are now living in a world with a "global capitalist economy that is more flexible, resilient, open, self-correcting, and fast-changing than it was even a quarter of a century earlier", people are going to believe that, too, and they're going to behave accordingly. I wouldn't be surprised if in the wake of the book's publication the economy surges up a bit: Greenspan just said a bunch of positive things about the economy, so let's all go out and do stuff with money.
The historical narrative in the first half of the book is fascinating, not because I wasn't familiar with the basic events (I lived through and remember most of chapters 5-11), but because the perspective of an economist lights things up just differently enough to show up some things (trends, causes, and generalities) that I'd not been aware of before. Greenspan is a much better writer than I would have expected, and his story is compelling.