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The Age of Turbulence: Adventures in a New World by Alan Greenspan
Book Summary InformationAuthor: Alan Greenspan Edition: Paperback Audio: English (Original Language); English (Unknown); English (Published) Published: 2008-09-09 ISBN: 0143114166 Number of pages: 576 Publisher: Penguin (Non-Classics) Product features:
Book Reviews of The Age of Turbulence: Adventures in a New WorldBook Review: "I Was Wrong", It's Still a Good Book Summary: 4 Stars"I Was Wrong" But It's Still a Good Book
Even after the senate hearings on the economic collapse and the PBS documentary on Brooksley Born, I still think this is a good book. There is so much in this book, it warrants a second reading.
The title of this book reflects the economic impact that the internet and the computer revolution brought to the world. Efficiencies skyrocketed during the 90's and the economic analysis had to change to track this change in economic productivity. The speed, quantity, and quality of information of the "internet world" have changed the way societies can economically organize themselves. Another contributing factor to our age of turbulence is the China factor. The size and technological timing of an economic player the world has never seen before has had a dramatic impact on our lives to date and will continue to affect us for a long time to come. Truly a remarkable time we are living in. Greenspan explains these drivers and how we have to adapt to the changing world.
The book gives you an applied explanation from one that is pulling the levers on the economy through monitory policy and interest rates. It is a good counter balance to those that are outside of the decision making process that state arguments about the practice of economics that affect the quality of our daily lives.
The first part of the book provides background on who Greenspan is and the influences in his life as he grew up and became a practicing economist. His competitive nature, the environment he was growing up in, his family background.
I like the description and the form that Greenspan uses to describe his life and the experiences he has had to highlight the different roles that economists can take in life.
Greenspan recalls in the book many experiences with presidents and powerful decision makers. His experience with different administrations from Ford to Bush W. gives the reader an interesting incite into each of these personalities that made important decisions over the 30+ years.
Greenspan's first term as Fed chairman started with the decisions of Black Monday in October 1987. This chapter reads like an economic suspense novel based on real life decisions. The suspenseful drama of trying to maintain financial confidence in the economy was for me was a "page turner", one of my favorite chapters. This chapter illustrates the "irrationality" the market can demonstrate that requires human intervention to minimize its disturbing effect on our lives.
Like most books that deal with business cycles, the phrase "cascade of defaults" comes up in the chapter on "Black Monday". I just finished the "Rethinking the Great Depression" by Gene Smiley and the same phenomenon was one of the central themes in that book.
The book takes us through the fall of the Berlin Wall and the international consequences of the changes of Eastern Block countries and arguments around ways of organizing societies. Capitalism is the best method according to Greenspan and I agree. I don't agree with his view on regulation. Even with the flaws of the application of regulation, I believe innovative applications can evolve over time and have to be ongoing to keep the market as efficient as possible.
Considering the latest economic downturn, Greenspan devotion to the "economic resilience" of the market (p.110) reveals his belief that the market can do no wrong and if it does then it will take care of the "wrong". After watching the PBS documentary "The Warning", the market can do wrong and it's the tax payer that has to pay for the market's (Wall Street) wrongs. A quote from Micheal Lewis' article "The End" describes the "wrongs" of Wall Street near the end of his article when he describes his lunch meeting with former C.E.O. of Solomon Brothers, John Gutfreund. Lewis describes Gutfreund with the following quality "The same veneer of denatured courtliness masked the same animal need to see the world as it was, rather than as it should be."
Continuing on through Greenspan's chairmanship, Greenspan takes us through the dot com bubble and the irrational exuberance of the 90's, the 9/11 experience, and the real estate bubble of the "00" decade or "uh oh" decade. His views at times are a little on the braggart side but I can tolerate this for his incite on the economy.
Greenspan has a lot of information to tell us and among the more interesting notes he has to tell us includes his perception of the rift that the civil rights movement caused in the South for the Democrats and their reduced popularity. He describes Washington's camaraderie post-civil-rights as one that is "forced and synthetic".
I could go on about other chapters but this review is too long as it is. The only other note I would like to make is on the "Conundrum" chapter. This started a fascinating exploration of the different causes that came together for the latest recession. In the "Conundrum", Greenspan discusses the excess liquidity from China and the problems the Fed had raising interest rates and the global problem of low long term interest rates. The ironic part about my exploration is that I discovered through an IMF report from 2006 that China was saving much more than what Greenspan reported (32%). China was saving close to 50% of their GDP, not 32%. (See my blog: [...])
In conclusion, I recommend this book and I will read parts of this book again.
Mark.
Summary of The Age of Turbulence: Adventures in a New WorldThe Age Of Turbulence is Alan Greenspan's incomparable reckoning with the contemporary financial world, channeled through his own experiences working in the command room of the global economy longer and with greater effect than any other single living figure. Following the arc of his remarkable life's journey through his more than eighteen-year tenure as chairman of the Federal Reserve Board to the present, in the second half of The Age of Turbulence Dr. Greenspan embarks on a magnificent tour d'horizon of the global economy. The distillation of a life's worth of wisdom and insight into an elegant expression of a coherent worldview, The Age of Turbulence will stand as Alan Greenspan's personal and intellectual legacy. In the immediate aftermath of September 11, 2001, in his fourteenth year as Chairman of the Federal Reserve Board, Alan Greenspan took part in a very quiet collective effort to ensure that America didn't experience an economic meltdown, taking the rest of the world with it. There was good reason to fear the worst: the stock market crash of October 1987, his first major crisis as Federal Reserve Chairman, coming just weeks after he assumed control, had come much closer than is even today generally known to freezing the financial system and triggering a genuine financial panic. But the most remarkable thing that happened to the economy after 9/11 was...nothing. What in an earlier day would have meant a crippling shock to the system was absorbed astonishingly quickly. After 9/11 Alan Greenspan knew, if he needed any further reinforcement, that we're living in a new world - the world of a global capitalist economy that is vastly more flexible, resilient, open, self-directing, and fast-changing than it was even 20 years ago. It's a world that presents us with enormous new possibilities but also enormous new challenges. The Age of Turbulence is Alan Greenspan's incomparable reckoning with the nature of this new world - how we got here, what we're living through, and what lies over the horizon, for good and for ill-channeled through his own experiences working in the command room of the global economy for longer and with greater effect than any other single living figure. He begins his account on that September 11th morning, but then leaps back to his childhood, and follows the arc of his remarkable life's journey through to his more than 18-year tenure as Chairman of the Federal Reserve Board, from 1987 to 2006, during a time of transforming change. Alan Greenspan shares the story of his life first simply with an eye toward doing justice to the extraordinary amount of history he has experienced and shaped. But his other goal is to draw readers along the same learning curve he followed, so they accrue a grasp of his own understanding of the underlying dynamics that drive world events. In the second half of the book, having brought us to the present and armed us with the conceptual tools to follow him forward, Dr. Greenspan embarks on a magnificent tour de horizon of the global economy. He reveals the universals of economic growth, delves into the specific facts on the ground in each of the major countries and regions of the world, and explains what the trend-lines of globalization are from here. The distillation of a life's worth of wisdom and insight into an elegant expression of a coherent worldview, The Age of Turbulence will stand as Alan Greenspan's personal and intellectual legacy. | | A Timeline of a Remarkable Career | | Mar. 6, 1926 | | Born in New York City | | 1936 | | At 10 sees Roosevelt campaigning; becomes expert on the 1936 Yankees | | 1938 | | Takes up clarinet at 12 | | 1943-44 | | Studies clarinet at Julliard | | Mid 1944 | | Joins Henry Jerome Band | | 1948 | | Graduates (summa cum laude) from New York University. (He later earns a master's in 1950 and a Ph.D. in 1977, also from NYU.) Hired as economic analyst at the Conference Board. | | 1954-74 | | Co-founds Townsend-Greenspan & Co. Inc., an economic consulting firm in New York City. (He returns in 1977.) | | 1974 | | Nominated by President Ford as chairman of the President's Council of Economic Advisors. | | 1983 | | Chair of bipartisan National Commission on Social Security Reform. | | June 1, 1987 | | Nominated by President Reagan for Fed Chair. Confirmed by Senate August 3. | | Oct. 19, 1987 | | Only 69 days into Greenspan's term, the Dow drops 508 points and 22%. | | July 10, 1991 | | Nominated by President George H.W. Bush to a second term as Fed Chairman. Later nominated to a third (February 22, 1996) and fourth term (January 4, 2000) by President Clinton. | | Apr. 6, 1997 | | Marries Andrea Mitchell | | May 18, 2004 | | Nominated by President George W. Bush for a fifth term as Fed chairman | | Jan. 31, 2006 | | Completes 18 ? years at the Fed | | Feb. 1, 2006 | | Forms Greenspan Associates LLC, an economic consulting firm | | | Alan Greenspan's Top 10 Classical and Jazz Favorites
Before Alan Greenspan embarked on his legendary financial career, he studied the clarinet at Julliard and played as a professional jazz musician (while doing tax returns for his bandmates). He chose 10 favorites for us from a lifetime of listening, including:
|  | Mozart, Piano Concerto No. 23
|  | Vivaldi, Complete Cello Concertos
|  | Coleman Hawkins, "Body and Soul"
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