Alan Greenspan's book "The Age of Turbulence" is unemotional. He teaches us how to improve the human condition, effectively, through economics. His answer: avoid economic populism (doing what feels good but actually retards prosperity) while maintaining enough restraint on income disparity that the rabble who would destroy democratic free market capitalism can at kept on a low simmer. Imbued with a false humility, this transparent attempt to gild his legacy still impresses. Alan is no dummy.
His insights into the Presidents from Nixon to Bush 43, all of which - save Carter - he worked with, are fascinating. Despite being a fiscally conservative Republican he seems to like Clinton perhaps most of all.
I highly recommend this book. I found it to be practical, educational and quite good at stating the case for the necessity of the protection of property rights as a precondition to any improvement in human welfare.
From the time Greenspan became Fed Chairman until today, America has experienced a uniquely happy circumstance of extraordinarily low inflation and low unemployment simultaneously - the opposite of "stagflation". Mr. Greenspan is often lauded as the genius who made this happen but his take is more humble: it was rapidly advancing technology and the fall of the Berlin wall.
The fall of The Wall dumped over a billion people into the global workforce (witness China today vs. how they were when Nixon visited) creating a huge disinflationary pressure on global labor rates. Technology - especially the internet - has enabled that labor to participate more fully in the global economy.
Much of that technology was created by small technology businesses, like yours and mine.
We are therefore an important part of the global force that has lifted hundreds of millions - mostly in Eastern Europe and the Far East - out of the most horrendous kind of abject poverty.
But Alan argues that the disinflationary pressures of the global labor pool are abating now as salaries in China, India and elsewhere rise. Our free ride is just about over. Stagflation will be back soon, just in time for and enabled by record federal deficits.
Prepare to feel nostalgic.
Curt Finch is the CEO of Journyx and an author
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