Book Review: The Age of Turbulence

It took me a while to get through Alan Greenspan's The Age of Turbulence , but it was well worth it.

The book can be thought of as a combination of three things, in overlapping parts. First, Greenspan's autobiography, focusing on the parts of his upbringing and career that led to his chairing the federal reserve. Secondly, a modern history of economics, US economic policy and of the past seven presidential administrations with which he worked, and of his assessment of the state of international economics and its major players. Third, it serves as his assessment of where things are heading, reviewing the major drivers that in his view affect his forecast of the next twenty five years (through 2030 - the book was published in 2007)

One of the two things I liked most about the book as the behind-the-scenes look at his relationship with all the Presidents he got the chance to work with (Presidents Nixon, Ford, Carter, Reagan, Bush I, Clinton, and Bush II). He cites Clinton as the smartest, followed by Nixon (though he found him paranoid and with a worrisome mean streak), and he had some fairly scathing words for G.W. Bush and his policies erasing the budget surpluses that Clinton had helped grow.

The other thing I liked most was that I found the book to be a good crash course in world economics, given from the perspective of someone who developed relationships with many of the world's leaders and/or their chief economists. His view of the future may or may not be correct (see criticisms below) but his view of the factors shaping the future comes from a perspective few others can offer and seems to stand up to scrutiny.

The major criticisms of the book that most seem to raise come from two perspectives. First, he's an unabashed believer in free-market capitalism, and many think his ideology clouds his judgement. This may be the case, but regardless I think he's able to see things with some degree of objectivity. He is above all data-driven, which in most cases keeps his ideology in check.

That said, the second major criticism of the book, related to the above, is that his belief in minimally-regulated free markets, was a major contributor to the housing crisis of recent years, and that even at the time of writing as it seemed the economy was on the edge of a cliff, he didn't see it. This may be true, but I saw a silver lining in this aspect. It's in this aspect of the book that you can see confirmation bias at work, and I found it a sobering reminder than even those with deep expertise are susceptible - perhaps even more so - to such failings.

It's a pretty hefty book to get through but I thought it worth doing so.

The Age of Turbulence: Adventures in a New World