Maestro: Greenspan's Fed and the American Boom
By Bob Woodward
Simon & Schuster
270 pages, $25
In the early '60s, a young jazz musician named Alan Greenspan hung
up his clarinet and went to graduate school to study economics.
He was an unenthusiastic student, though, and his real education
came in the apartment of the charismatic writer Ayn Rand.
Rand, a Soviet émigré, called herself a "radical
for capitalism." Her novels--part bodice-ripping romances, part
tedious philosophical treatises--celebrated the absolute sovereignty
of the individual human will. She believed that the postwar United
States was evolving toward a quasi-totalitarian society, and that
true capitalism was an "unknown ideal." Rand's beliefs extended
to the minutiae of life; she chain-smoked because she thought cigarettes
demonstrated the Promethean capacity to master fire. When she died
of lung cancer in 1981, a six-foot-tall floral dollar sign stood
beside her coffin.
Greenspan was one of many conservative thinkers to file past that
monument to lucre
to pay his final respects. When he was young, he'd been known to others
in Rand's circle as "The Undertaker"--a reference to his sober demeanor.
Greenspan, who originally deemed himself a logical positivist, was
initially skeptical about Rand's ideas. He argued with her for hours
about whether or not he even believed in his own existence (eventually,
she won him over).
Alan's playing with the interest
rate again ...
Greenspan was compelled by Rand's argument that capitalism was
the only social order that fully unleashed and rewarded individual
will and reason. His biographer Justin Martin reports that Greenspan
had believed in the technical efficiency of capitalism when he met
Rand. But she convinced him of its moral rigor. The substance of
that ethos was evident in a 1967 letter he wrote to the New York
Times, defending his mentor's book against a hostile review. "Atlas
Shrugged," he wrote, "is a celebration of life and happiness.
Creative individuals and undeviating purpose and rationality ultimately
achieve joy and fulfillment. Parasites who avoid either reason or
purpose perish as they should."
The past two decades have been kind to Alan Greenspan--but not
to Bob Woodward, author of Maestro: Greenspan's Fed and the American
Boom. When Greenspan was hanging out at Rand's apartment, Woodward
had just started as a cub reporter at the Washington Post.
His moment of glory, of course, came when he and Carl Bernstein
broke the Watergate scandal. The early '70s were great days for
journalists, whose skepticism about authority and faith in the power
of the press reflected the insurgent spirit of the civil rights
movement, the antiwar protests and the rising feminist movement.
With hierarchies of all kinds being overthrown, why shouldn't a
28-year-old topple a president?
But as the political culture grew conservative, Woodward grew restrained.
Today, he is no longer a scrappy newspaperman but an Establishment
journalist, who has traded independence for access, cynicism about
power for interviews with those who wield it. Greenspan's rise parallels
Woodward's decline, suggesting a larger transformation in how Americans
think about the economy and what we expect from political life.