About Greenspan, Bill Clinton
( ... ... ) Greenspan had made this speech to Reagan and to Bush (and later to the next President Bush, but none had acted on his advice. In fact, all three Republican presidents went the exact opposite way, increasing the deficit by dizzying amounts. Greenspan had been a prophet crying in the wilderness without honor in his own partyㅡGreenspan was a Republican. "Now I know how Cassandra feels," he wrote.
Greenspan's encounter with Clinton was a shock. "To my delight," wrote Greenspan, "he seemed to pick up on my sense of urgency about the deficit, and asked a lot of smart questions that politicians don't ask." Not only did Clinton get Greenspan's gospel, but he was Greespan noted, a kindred spiritㅡa fellow wonk. "Our meeting, which had been scheduled for an hour, turned into a lively discussion that went on for almost three. We touched on a whole range of topics beyond economicsㅡSomalia and Bosnia, and Russian history, job-training programs, education. ... So the saxophone wasn't the only thing we had in common. Here was a fellow information hound, and like me Clinton enjoyed exploring ideas."
Greenspan left the meeting thinking that Clinton really got it. He found Clinton so sincere that, if he were faking, it would be the most frightening impressive display of lying he had ever seen in his entire life. The irony of the situation did not escape him. Though Republicans were supposed to be the party of fiscal responsibility, the terrible deficits facing the country had been created by Ronald Reagan, a Republican president, and then made worse by his Republican successor, George Bush. Now, a Democratic presidentㅡstandard bearer for the party of tax-and-spend liberalismㅡwas promising to fix the problem. A ^Democrat^.
Clinton came back from the meeting elated, saying his instincts told him that eh could "do business" with Alan Greenspan. As usual, Clinton's interpersonal instincts proved correct. Greenspan admit that while he had a "terrible relationship" with the first president Bush, under Clinton "the relationship between the Treasury and the Fed had never been better." And this relationship began in that meeting on December 3, 1992.
The other thing that impressed Greenspan was the fiscally conservative economic team Clinton put together, which included fiscal conservatives like Lloyd Bentsen, Leon Panetta, Alice Rivlin (who would later work at the Fed), Bob Rubin, and Larry Summers.
"What jumped out at me was that Clinton was taking a page out of Kennedy's book. All of Clinton's economic policy appointees were fiscally conservative centrists. ... Choosing them made Bill Clinton seem about as far from the classic tax-and-spend liberal as you could get and still be a Democrat."In his memoir, Greenspan revealed that he secretly developed an unusually close working relationship with Bob Rubin and Larry Summers:
"Rubin, Summers, and I met confidentially over breakfast each week for the next four-and-a-half years. ... We'd get gather at 8:30 A.M. in Bob's office or mine, have a breakfast brought in, and then sit for an hour or two, pooling information, crunching numbers, strategizing, and brewing ideas. I always came out of these breakfasts smarter than when I arrived."
( ... ... )
Clinton's advisers were deeply divided over the deficit-cutting strategy. ( ... ... )
[Businessweek's review] Greenspan's Memoir Looks Forward (September 17, 2007)