Join BookBrowse today and get access to free books, our twice monthly digital magazine, and more.

Excerpt from Maestro by Bob Woodward, plus links to reviews, author biography & more

Summary |  Excerpt |  Reviews |  Readalikes |  Genres & Themes |  Author Bio


Alan Greenspan's Fed and the American Economic Boom

by Bob Woodward

Maestro by Bob Woodward X
Maestro by Bob Woodward
  • Critics' Opinion:

    Readers' Opinion:

  • First Published:
    Nov 2000, 288 pages

    Oct 2001, 288 pages


  • Rate this book

Buy This Book

About this Book

Print Excerpt

"My personal preference is strongly for _," Blinder concluded. "...I thought hard about whether I should dissent on this matter, and I did not decide until last night. I finally decided that I won't....I think it is better to show a united Federal Reserve against the criticism that we are surely going to get for this move." Blinder would go along with the rate hike, but he made it clear that he would stand strongly against raising rates again at the next meeting.

"Okay," Greenspan said, right on the tail of Blinder's long speech about his struggle. "I propose that we move _ percent."

All 12 members voted yes.

Blinder had gone with the chairman because he didn't want to use the power of his dissent on what could be seen as a tactical dispute. The practical difference between _ percent and _ percent, in terms of measurable effects on the economy, was quite small. Blinder's chief concern was where they might be heading in the months to come.

He also knew that there was a tradition at the Fed that members go along with the chairman unless they are really uncomfortable, terribly uncomfortable. This is especially true of the vice chairman. Nobody at the Fed, as far as Blinder knew, could remember the last time a vice chairman had dissented from the will of the chairman.

Blinder also realized that if he shot his cannonball now, it would be wasted -- because he wasn't going to change the decision. He would have fallen on his sword for no reason.

Blinder came from an academic environment, where he was used to following his conscience. It had become clear to him that voting solely on the basis of his convictions and economic conclusions wouldn't work at the Fed.

The year 1995 was no better for Blinder, and he and his wife Madeline flew to Acapulco, Mexico after Christmas to vacation on the beach, so he could stare at the water and decide whether he should seek reappointment as vice chairman when his term expired in early 1996. It was a hard decision. After less than two years at the Fed, he was profoundly frustrated.

Blinder believed he had figured out what was so disconcerting. Greenspan didn't allow any risk. If there was a 2 percent or a 4 percent probability that something might happen -- such as Blinder succeeding him or Blinder's star rising -- Greenspan worked to bring the probability down to zero. Most people would tolerate low chances. Greenspan wanted to stomp out the slightest probability. That's why Greenspan had stuck the knife in him, Blinder believed, in so many ways and so skillfully. And there were no fingerprints.

Blinder decided he should leave. He wanted to be a lame duck for as short a time as possible, so he cut it tight and told the White House only two weeks before the expiration of his term. As a little piece of revenge, he decided not to tell Greenspan. Blinder figured the chairman could read about his departure in the newspapers. After all, Greenspan had never really told him anything, never really let him in the way Blinder had hoped. He realized it was childish on his part. The news of his departure hit the papers on January 17, 1996.

Greenspan said nothing to Blinder, but he presided at a little going away party for him.

You know, Greenspan said graciously at the ceremony, it seems like you just got here, it's been wonderful to have you.

Ha, ha, Blinder thought as he stood nearby in deep discomfort.

How much, Greenspan continued, he had enjoyed having Blinder as a colleague, how valuable he had been to the FOMC and the board, what a shame he was leaving so soon.

Ha, Blinder thought again. He concluded that Greenspan was not a straight person, not open and direct in the way that Blinder expected of colleagues. He had just wanted to be part of the interest rate game, and Greenspan had not permitted it.

Copyright © 2000 by by Bob Woodward, Simon & Schuster

Membership Advantages
  • Reviews
  • "Beyond the Book" articles
  • Free books to read and review (US only)
  • Find books by time period, setting & theme
  • Read-alike suggestions by book and author
  • Book club discussions
  • and much more!
  • Just $45 for 12 months or $15 for 3 months.
  • More about membership!

Support BookBrowse

Join our inner reading circle, go ad-free and get way more!

Find out more

Top Picks

  • Book Jacket: Henry Henry
    Henry Henry
    by Allen Bratton
    Allen Bratton's Henry Henry chronicles a year in the life of Hal Lancaster. Readers already ...
  • Book Jacket: The Last Murder at the End of the World
    The Last Murder at the End of the World
    by Stuart Turton
    The island is the only safe place left on Earth. Since a deadly fog overtook the planet, the ...
  • Book Jacket
    A Kind of Madness
    by Uche Okonkwo
    The word "madness," like many others that can be used to stigmatize mental illness — e.g., "...
  • Book Jacket: Long After We Are Gone
    Long After We Are Gone
    by Terah Shelton Harris
    Terah Shelton Harris's marvelous family drama Long After We Are Gone begins with the death of the ...

BookBrowse Book Club

Book Jacket
Look on the Bright Side
by Kristan Higgins
From the author of Pack Up the Moon comes a funny, romantic, and moving novel about life's unexpected rewards.
Book Jacket
The Pecan Children
by Quinn Connor
Two sisters deeply tied to their small Southern town fight to break free of the darkness swallowing the land whole.
Win This Book
Win Bright and Tender Dark

Bright and Tender Dark by Joanna Pearson

A beautifully written, wire-taut debut novel about a murder on a college campus and its aftermath twenty years later.



Solve this clue:

A W in S C

and be entered to win..

Your guide toexceptional          books

BookBrowse seeks out and recommends the best in contemporary fiction and nonfiction—books that not only engage and entertain but also deepen our understanding of ourselves and the world around us.