This book is based on almost unlimited access to Alan Greenspan, his papers, and his colleagues and friends, all of whom were generous in their collaboration. For a period of five years, starting in the autumn of 2010, I was a familiar visitor to Greenspan’s offices in Washington, D.C., and saw him in other contexts, too: at home, hosting a dinner for a former British prime minister; at his suite in the Ritz on New York’s Central Park South, where the staff welcomed him with a model of the Federal Reserve building made out of chocolate; on the Acela train between his two home cities, where he tipped the porters generously, proclaiming a belief in redistribution. At some point in this process, after we had logged more than seventy hours of recorded conversations, I stopped counting the time. The intriguing bits seemed to come at the least expected moments, and they were not always when the recorder was running. Once, after Greenspan had mentioned his love of automobiles, and particularly their ability to lift his mood from a dark patch, I sent a note over to his office, wondering how seriously he had meant this. Later that day, Greenspan replied:
Dear Sebastian,
In 1959 I bought a Buick convertible with tail fins and red leather seats. It did cheer me up driving on highways with J.S. Bach loudly pouring out of my car radio speakers. I do not recall being depressed prior to the purchase, however.
Best,
Alan
I looked around for a photo that matched Greenspan’s description, and sent it over to him. Greenspan’s assistant relayed his answer:
AG said this is his car! But his was red interior with black exterior (not white, as in the photo). He said he had air conditioning.
In the margins of conversations about money and power, the private man would surface unpredictably. Once, rather early in the process, I asked Greenspan about his romantic life. “I dated news anchors, senators, and beauty queens,” he stated, a bit mischievously. I asked him what made him most happy. A sense of progress, a life trajectory angled upward at the steepest possible incline, he replied, with disarming honesty. I asked him why, despite having spent almost two decades as the world’s most powerful economist, he still persisted in describing himself as a “sideman.” The answers stretched back to the love and injury he had experienced as a child. His ambition, his shyness, the manner in which he navigated Washington—all had their roots in a 1930s boyhood on the northern tip of Manhattan.
Some of the best research discoveries came almost despite him. Several assiduous reporters had tried to lay hands on Greenspan’s early writings, contained in his doctoral thesis; oddly, New York University, which awarded the degree, had lost it. But after several months of sitting at the round table in Greenspan’s office, I noticed a pattern: when he referred to his youthful thinking, his eyes would drift up to a certain shelf; and, following his gaze, I spied a fat binder. One day, when Greenspan returned to the subject of his intellectual development, I looked up at that same shelf. I would love to read that early work, I said, staring purposefully at the binder. Despite the awkward nature of the content, he gave it to me.
I knew that in the 1960s, when Greenspan had been the de facto chief economist for the claque of libertarians clustered around the novelist Ayn Rand, he had delivered a series of lectures titled the Economics of a Free Society. I wondered if there were recordings, or possibly a text, affording an insight into Greenspan’s worldview as he crested his late thirties. One day, as I tracked down Greenspan’s friends and colleagues from those times, I found myself in a secluded cabin in the woods of Virginia, talking to Lowell Wiltbank, who had managed the computers and machines at Greenspan’s small consulting firm. Learning that Wiltbank was himself a devotee of Rand’s thinking, I asked whether he had kept memorabilia from her movement. His basement was stocked with it, he said. Before very long, I had three hundred pages of transcripts: the complete map of my subject’s mind, at the height of his intellectual purism.
Inevitably, research of this kind involves drilling many dry boreholes. But the gushers repaid me: the personal files of the Republican provocateur Patrick Buchanan, which contained Greenspan’s unapologetically conservative memos to Richard Nixon on the racial tensions and assassinations of 1968; the untold story of the Fed’s record on derivatives and mortgages, teased out of interviews and documents released under the Freedom of Information Act; the sensitive memories of some of the women who loved him, foremost among them his wife, Andrea Mitchell. As I write in my acknowledgments, my own discoveries were augmented by an exceptional research team at the Council on Foreign Relations. Between us, we conducted hundreds of interviews and consulted thousands of pages of documentary sources in an attempt to reconstruct a life as vividly and accurately as possible.
I was moderately surprised when Greenspan agreed to cooperate with this project. I approached him after he expressed admiration for my history of hedge funds, which he cited in his own retrospective work on the 2008 financial crisis. But I imagined his attitude might be colored by an earlier book: my account of the World Bank under its tempestuous boss James Wolfensohn. Although my verdict on Wolfensohn had been broadly positive, it had not been received well: Wolfensohn sought to discredit me, and the World Bank bookshop decided not to display the stacks of copies it had ordered. During one of his tantrums, Wolfensohn’s staff had arranged for a distinguished friend to call and calm him down. The friend was Alan Greenspan.
Despite this unpropitious background, Greenspan did agree to talk to me, even though he understood that he could claim no power over my account or my conclusions. On the advice of my literary agent, I tried to lock him in, asking that he sign an agreement promising cooperation with me and no other author. At this, Greenspan balked, observing that at some point I was likely to start doing things that he disliked; and since I was not offering to bind my hands, he was not about to bind his either. After that testy beginning, we proceeded on the basis of mutual autonomy—a fitting formula for the biography of a libertarian—and I would not in retrospect have wished anything different. The arrangement gave me full access to my subject combined with untrammeled independence. Married to one journalist, a courter of others over many years, Greenspan understood that he should not try to control me.
At the end of my writing, I hesitated to show my manuscript to Greenspan. Nothing in our relationship required me to do so, and I recognized the risks in putting my cards on the table. The mere extent of my research might come as a shock: in some cases, I had not told Greenspan about the documents I had unearthed because these often spoke for themselves and did not require his comment or elaboration. Besides, people generally do not find it easy to swallow an outsider’s unvarnished account of their doings—like Wolfensohn before, Greenspan might react by firing back at me. Inevitably, the evidence had led me repeatedly to an understanding of my subject’s actions and motives that was at variance with his own account—he was not going to like that. But after some deliberation, I did show Greenspan the pages. For one thing, openness seemed the more honorable course; he had been open with me, after all. For another, I wanted to submit my research to this final check. After five years of exhaustive efforts to get to the truth, it seemed right to test my results one last time against my subject’s memory.
Three weeks after receiving my pages, Greenspan called me in London. We had two long conversations during which he vigorously disputed my interpretations in only a handful of places. The rest he accepted, noting with a chuckle that my history was perhaps more accurate than positive. I deferred to him on one detail about his relationship with his parents, and added a point about his motives in resisting derivatives reform in the late 1990s. In other instances, I weighed what he said but left my account substantially unaltered.
Positive or not, I hope this history is instructive. As the most influential economic statesman of his age, Greenspan spent a lifetime grappling with a momentous shift: the transformation of finance from the fixed and regulated system of the postwar era to the free-wheeling free-for-all of the past quarter century. No other individual was closer to the decisions that attended this change. The story of Alan Greenspan is also the story of the making of modern finance.