Summary of The Man Who Knew

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9 Importance

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Recommendation

Historian Sebastian Mallaby details Alan Greenspan’s life, from his days as a traveling jazz musician to his career as a researcher, consultant, government economic adviser and chair of the US Federal Reserve. Mallaby’s presentation of the time Greenspan spent atop the Washington, DC, power pile delivers a history lesson in macroeconomics, US politics and the remarkable period of the Great Moderation. Mallaby concludes that the former head of the US central bank could have acted differently to reduce the scope of the 2008 financial crisis but that his failings were understandable. He paints Greenspan as neither a “maestro” genius or a foolish ideologue, but as an unusually talented man who did his best, tried to learn from experience and, arguably, got far more things right than wrong. getAbstract believes you won’t want to skip a page of this fascinating, albeit hefty, biography.

In this summary, you will learn

  • What Alan Greenspan believed in and how he worked;
  • How Greenspan maneuvered through the Washington, DC, political minefield; and
  • How to reassess Greenspan’s reputation in light of the 2007–2009 recession.
 

About the Author

Sebastian Mallaby is a senior fellow at the Council on Foreign Relations and a columnist for the Washington Post. He also wrote More Money Than God.     

 

Summary

Right-Wing Libertarian

In his early decades, Alan Greenspan’s economic and political views were sharply at odds with those of the American establishment, though he’d eventually become a central figure in that establishment. Greenspan supported individual enterprise and free markets, and he idolized the great industrial tycoons of the 19th century. But, after World War II, US administrations had moved in the opposite direction, toward “New Frontier” economics. This approach prioritized full employment and maximum economic growth. It sought to manipulate the side effects of pumped-up markets through intervention and fine-tuning policies, such as wage, price and capital controls, while influencing the Federal Reserve to hold down base interest rates. Greenspan felt this methodology stored up problems that would require mediation in the future. In the 1960s, while observing the US economy from his “perfect perch” as a partner in his successful investment consultancy, Greenspan befriended author Ayn Rand. He respected the extreme libertarian thinker and attended her discussion group, the Collective, giving lectures and developing policy proposals. In that period, under Rand’s influence and in reaction to profligate US governments, Greenspan wanted to abolish the Fed’s control of monetary policy in favor of a rules-based currency system underpinned by the value of gold.


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