Wednesday, September 05, 2007
by Alan Greenspan
I started thinking about what was to become “The Age of Turbulence” two years ago. My nearly two decades as Federal Reserve Chairman were coming to an end - a remarkable experience. After a lifetime observing how the world works as a business economist on Wall Street, it was exhilarating to be at the center of international monetary policymaking. Sure, I’d been President Ford’s White House economic advisor in the mid-1970s, but nothing fully prepared me for what I faced when President Reagan nominated me Fed Chairman in June 1987. So, in the waning months of my Fed tenure, I started getting excited about having time to stand back and think about all I’d been through – the frightening stock market crash of 1987, the boom of the 1990s, the trauma of 9/11, the climactic end of the Cold War, all told, a cascade of events propelling a new world forward at warp speed.
There was also a personal story to tell. I’d known every president from Richard Nixon to Reagan, Ford, Bill Clinton and George W. Bush. And what about all those other assorted characters from my childhood in New York, my years as a jazz musician, my complete career switch to economics – and my friendship with Ayn Rand? I wanted to make the leap from writing economic analysis to writing in the first person about what I’d experienced. And after years of talking “Fedspeak” in carefully calibrated congressional testimony – I could finally use my own voice!
As I wrote “The Age of Turbulence,” I tackled the personal part first, but then started unraveling the detective story about the economy: what did all the economic shifts we began to detect in the late nineties mean? At the Fed, I had at first focused primarily on monetary policy – interest rates and the forces that determined their appropriate levels. But as the years rolled on, it became increasingly clear to me that we needed to understand an entirely new range of factors to implement policy effectively. I had had inklings of this new world, of course, but as I raced from one policy meeting to another, I never had time to sit back and think about all this. Was this a permanent change or just another technological evolution that would, with time, come to an end? Would the growing income inequality that seemed to be associated with this new paradigm create a backlash to the forces of globalization? And wasn’t this a dangerous trend for our democracy?
My term as Federal Reserve Chairman ended at midnight, January 31, 2006. The following morning, I started to write. You would think after all those years at the Fed and my earlier decades as an economist that I would have learned about as much as I could. But halfway through the book I realized that the story was leading me in surprising directions. I needed to refocus much of what I had written in my original drafts.
The final chapter was to forecast how I thought the world would work in the year 2030. But until I spent a year researching and writing and thinking about “The Age of Turbulence,” I had little idea how it would turn out. In fact, I was having so much fun rethinking some of my earlier assumptions, I was as anxious to read it as I hope my readers will be. In the end, I can confidently say writing that final chapter brought me—and the book—closure. It is not the grand finale of Beethoven’s Ninth, but for me, it hit the right chord.