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

  • 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

The next day, The New York Times reported that Blinder had held an "unscheduled" press conference. Son of a bitch, he said to himself. It looked as if he were putting himself forward, showboating. Fed governors didn't have press conferences. If he hadn't been discussed as a possible contender for Greenspan's job in 1996, Blinder believed the press attention would have subsided. He consistently maintained that he had never spoken to the White House about the possibility, and he seemed hurt that his relationship with Greenspan had been damaged. Nonetheless, Blinder refused to close the door on the possibility he might become the next Fed chairman.

He talked to The Wall Street Journal and was asked if he wanted to succeed Greenspan. "I don't spend a lot of time thinking about it," he said, suggesting that he spent at least some time on the subject. "It's a fantastic opportunity if it comes along. For the time being," he continued suggestively, "we have a very good chairman of the Fed. The job is not open."

In the days before the FOMC meeting on November 15, Blinder thought the economy was looking stronger -- too strong. A roar was coming up from the markets, saying that the Fed had goofed with its sideline statement and was behind the curve. Greenspan asked to see him again. When the chairman arrived, he said he wanted to make a dramatic gesture to show that the Fed was not behind the curve, to show the Fed's teeth in a big way.

Blinder agreed, saying that the economy was running hard and something had to be done. He told Greenspan that he would have no trouble with a _ percent increase at the coming meeting.

Greenspan wanted to move a full _ percent.

Blinder was a little bit surprised. He had concluded that they would eventually have to move a total of _ percent, but he thought that it might be wise to do it incrementally.

Greenspan wanted to get there right away. He didn't cite any specific data, focusing instead on his feeling that the pot was boiling and that _ percent was the only way for the Fed to get out ahead of the markets.

It was a major disagreement. Blinder was worried that _ of a point all at once could shatter confidence in the markets and have a negative effect on the rest of the economy, particularly on the people who were out there trying to buy homes.

Greenspan stood firm.

Hmmmmm-hmmmmm, Blinder finally said noncommittally -- a kind of unspoken "I don't know..." He did not indicate to the chairman that he would go along.

At the November meeting, Blinder said they might be heading toward raising rates so much that the Fed might chokes off most economic growth. What they were contemplating was not trivial. "It is very strong medicine," he said. Enough to stop even an economy with considerable momentum. "It is therefore not to be prescribed lightly."

"I must say the discussion this morning has been one of the best discussions I have heard around this table in quite a long while," Greenspan said when the others had finished. He said he would not dismiss Blinder's comments.

"I think we are behind the curve," he added, after offering a brief assessment of the economy. "I think that creating a mild surprise would be of significant value.

"So, I think that we have to be very careful at this stage and be certain that we are ahead of general expectations. I think we can do that with _ of a point."

To underscore his strong feelings, the chairman added, "I must tell you that _ percent makes me a little nervous. No, I take that back: It makes me very nervous and I would be disinclined to go in that direction." Anyone voting against him, in other words, was in favor of a very nervous chairman.

"I fear that doing _ of a point today rather than _ of a point may send us down an oversteering path," Blinder said. He reminded the committee that "the Greenspan Fed has never once moved the Fed funds rate by _ of a point in either direction. Not once. When this Fed has erred, it has been on the side of caution....I always thought that was a good idea.

Copyright © 2000 by by Bob Woodward, Simon & Schuster

Membership Advantages
  • Reviews
  • "Beyond the Book" backstories
  • 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 $10 for 3 months or $35 for a year
  • More about membership!

Support BookBrowse

Become a Member
and discover your next great read!

Join Today!

Editor's Choice

  • Book Jacket: Of Arms and Artists
    Of Arms and Artists
    by Paul Staiti
    In the late eighteenth-century, the United States of America was still an emerging country, ...
  • Book Jacket: So Say the Fallen
    So Say the Fallen
    by Stuart Neville
    Noir crime fiction – Raymond Chandler, Dashiell Hammett anyone? – is an American invention...
  • Book Jacket: The Mothers
    The Mothers
    by Brit Bennett
    Every now and then the publishing industry gushes about a young author destined to become the next ...
Book Discussions
Book Jacket
The Bone Tree
by Greg Iles

An epic trilogy of blood and race, family and justice.

About the book
Join the discussion!

First Impressions

  • Book Jacket

    North of Crazy
    by Neltje

    The remarkable life of a woman who carves her own singular path.

    Read Member Reviews

  • Book Jacket

    The Next
    by Stephanie Gangi

    Fast-paced, wickedly observant, and haunting in the best sense of the word.

    Read Member Reviews

  • Book Jacket

    The Comet Seekers
    by Helen Sedgwick

    A magical, intoxicating debut novel, both intimate and epic.

    Read Member Reviews

Win this book!
Win The World of Poldark

Win the book & DVD

Enter to win The World of Poldark and the full first series on DVD.


Word Play

Solve this clue:

One S D N M A S

and be entered to win..

Books that     

 & enlighten

Visitors can view some of BookBrowse for free. Full access is for members only.

Join Today!

Your guide toexceptional          books

BookBrowse seeks out and recommends books that we believe to be best in class. Books that will whisk you to faraway places and times, that will expand your mind and challenge you -- the kinds of books you just can't wait to tell your friends about.


Free Weekly Newsletter

Keep up with what's happening in the world of books:
Reviews, previews, interviews and more!

Spam Free: Your email is never shared with anyone; opt out any time.