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

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

Maestro

Alan Greenspan's Fed and the American Economic Boom

by Bob Woodward

Maestro by Bob Woodward
  • Critics' Opinion:

    Readers' Opinion:

  • First Published:
    Nov 2000, 288 pages
    Paperback:
    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 books that entertain, engage & enlighten!

Join Today!

Editor's Choice

  • Book Jacket: The Dark Flood Rises
    The Dark Flood Rises
    by Margaret Drabble
    Margaret Drabble, the award-winning novelist and literary critic who is approaching eighty and ...
  • Book Jacket: All Our Wrong Todays
    All Our Wrong Todays
    by Elan Mastai
    You need a great deal of time to read All Our Wrong Todays, but don't let that put you off. ...
  • Book Jacket: Dadland
    Dadland
    by Keggie Carew
    In her notable debut, Keggie Carew examines the life of her father Tom, a decorated war hero whose ...

Book Discussion
Book Jacket
The Atomic Weight of Love
by Elizabeth J. Church

In the spirit of The Aviator's Wife, this resonant debut spans from World War II through the Vietnam War.

About the book
Join the discussion!

First Impressions

  • Book Jacket

    Mercies in Disguise
    by Gina Kolata

    A story of hope, a family's genetic destiny, and the science that rescued them.
    Reader Reviews

  • Book Jacket

    Lola
    by Melissa Scrivner Love

    An astonishing debut crime thriller about an unforgettable woman.
    Reader Reviews

Who Said...

Dictators ride to and fro on tigers from which they dare not dismount. And the tigers are getting hungry.

Click Here to find out who said this, as well as discovering other famous literary quotes!

Word Play

Solve this clue:

O My D B

and be entered to win..

Books that     
entertain,
     engage

 & 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.

 
Modal popup -