Greenspan: The Man Behind Money. - book review

International Economy, The, May, 2001 by Dina S. Temple-Raston

Justin Martin, Greenspan: The Man Behind Money, Perseus Publishing, 2000.

Up Close and Personal

It could be every writer's nightmare to publish a book at the very same time, on the very same subject, as super-reporter Bob Woodward. Such was Justin Martin s fate when his publisher released his book, Greenspan: The Man Behind Money (Perseus Publishing, 2000), and watched it be eclipsed by Woodward's hagiographic Maestro.

Too bad, because for Fed aficionados, Martin's immensely readable biography offers the closest thing to a full color portrait of Greenspan. Unlike the Woodward effort, this is not a book for casual readers trying to make sense of the Fed. Martin's work is more suited to close watchers of the Fed--people who get a kick out learning that at the age of five, Greenspan added three-digit figures in his head or that he played on Ayn Rand's softball team.

Until now, most authors (Woodward included) have focused on Greenspan's work at the Fed. Two-thirds of Martin's book is devoted to Greenspan's life before he even went to the Fed. Martin, a former staffer at Fortune magazine, conducted exhaustive interviews with people who knew Greenspan before he was the icon he is today.

The book is as striking for the luminaries included as sources as it is for the multitude of childhood friends Martin managed to unearth. The list runs from Henry Kissinger, who was two years ahead of Greenspan in high school, to Greenspan's cousin, Wesley Halpert, and junior high school crush Corinne Eskris.

Using the Internet to look up former Greenspan intimates, Martin managed to interview four surviving members of a jazz band in which Greenspan played in 1944, half a dozen friends from his Ayn Rand days, his ex-wife, Joan Mitchell, and his current wife, NBC correspondent Andrea Mitchell.

All the stories are painstakingly sourced and, unlike Woodward's Maestro, the readers aren't left to wonder about agendas and selective memories.

Martin provides all the basics: Greenspan's childhood in Manhattan's Washington Heights section in a neighborhood heavily populated by Jewish immigrants, the separation of his parents, his aloofness as a child. Greenspan's friends say he was a good dancer, wasn't bar-mitzvahed, and flirted with a career in music until he decided that bebop wasn't for him and economics just might be.

After dropping out of Juilliard and traveling with Henry Jerome and His Orchestra (pulling down $62 a week playing dance halls), Greenspan decided to get an economics degree at New York University. It was there that he was inspired by professor Arthur Burns, who would later chair President Dwight Eisenhower's Council of Economic Advisors, and subsequently fell in with philosopher-novelist Ayn Rand. He helped research Atlas Shrugged and became, after much wooing, a member of her inner circle.

Nathaniel Branden, Rand's chief protege, kept after Greenspan to become a member of her cult like group, The Collective. Branden's pursuit of Greenspan had turned into something of a joke, according to Martin: "Rand would periodically check on Branden's progress. `How's the undertaker,' she'd sneer. `Has he figured out whether he exists or not?'"

Branden wasn't about to give up, Martin writes. "One day, Branden was riding in a cab with Rand. He had some surprising news and could hardly contain himself. Finally he just blurted it out. "Guess who exists?" Rand was shocked. "Don't tell me" she said, "you've won over Alan Greenspan."

Greenspan, according to Martin, was won over by The Collective's frequent discussions about economics. While Arthur Burns had pushed Greenspan into a free-market direction, it's Rand who finished the job, Martin says. "Because of her first-hand experience with communism, she pledged allegiance to capitalism with the intensity only a convert can summon."

Martin's ability to keep from being that sort of convert, to resist the Greenspan mystique, is also one of the book's strengths. Martin points out Greenspan's many blunders, such as when he described the vicious recession of 1974-75 as a "pause" in the economy.

What's more, Greenspan's consulting firm had the worst track record for forecasting inflation in the early 1980's among the eight leading economic consultants tracked by the Federal Reserve. (Greenspan's firm overstated inflation from 1982 to 1986 by between 1.2 and 2.4 percentage points.)

As Fed chief, he failed to see the 1990-91 recession coming, even to the point of insisting, months after the downturn started, that the economy was still on the upswing. The book is also more even-handed than Maestro in doling out responsibility for the 1990's boom--Martin doesn't give Greenspan the credit.

The weakness of the book, ironically, comes precisely in those areas where Woodward's is strongest. Once Greenspan arrives in Washington, Martin's narrative gets thin and predictable. The intimacy and immediacy of Martin's portrait grows dim. This could stem from the fact that, unlike Woodward, Martin did not secure Greenspan's help with the book.