"Alan Greenspan, who served as Federal Reserve chairman for 18 years and was the leading Republican economist for the past three decades, levels unusually harsh criticism at President Bush and the Republican Party in his new book, arguing that Bush abandoned the central conservative principle of fiscal restraint.

While condemning Democrats, too, for rampant federal spending, he offers Bill Clinton an exemption. The former president emerges as the political hero of "The Age of Turbulence: Adventures in a New World," Greenspan's 531-page memoir, which is being published Monday.

Greenspan, who had an eight-year alliance with Clinton and Democratic Treasury secretaries in the 1990s, praises Clinton's mind and his tough anti-deficit policies, calling the former president's 1993 economic plan "an act of political courage."

But he expresses deep disappointment with Bush. "My biggest frustration remained the president's unwillingness to wield his veto against out-of-control spending," Greenspan writes. "Not exercising the veto power became a hallmark of the Bush presidency. … To my mind, Bush's collaborate-don't-confront approach was a major mistake."

Greenspan accuses the Republicans who presided over the party's majority in the House until last year of being too eager to tolerate excessive federal spending in exchange for political opportunity. The Republicans, he says, deserved to lose control of the Senate and House in last year's elections. "The Republicans in Congress lost their way," Greenspan writes. "They swapped principle for power. They ended up with neither."

He singles out J. Dennis Hastert, the Illinois Republican who was House speaker until January, and Tom DeLay, the Texan who was majority leader until he resigned after being indicted for violating campaign finance laws in his home state.

"House Speaker Hastert and House majority leader Tom DeLay seemed readily inclined to loosen the federal purse strings any time it might help add a few more seats to the Republican majority," he writes.

He adds three pages later: "I don't think the Democrats won. It was the Republicans who lost. The Democrats came to power in the Congress because they were the only party left standing."

Greenspan, 81, indirectly criticizes his friend and colleague from the Ford administration, Vice President Cheney. Former Bush Treasury Secretary Paul H. O'Neill has quoted Cheney as once saying, "Reagan proved deficits don't matter."

Greenspan says, " 'Deficits don't matter,' to my chagrin became part of the Republicans' rhetoric."

He argues that "deficits must matter" and that uncontrolled government spending and borrowing can produce high inflation "and economic devastation."

When Bush and Cheney won the 2000 election, Greenspan writes, "I thought we had a golden opportunity to advance the ideals of effective, fiscally conservative government and free markets. … I was soon to see my old friends veer off to unexpected directions."

He says, "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences." The large, anticipated federal budget surpluses that were the basis for Bush's initial $1.35 trillion tax cut "were gone six to nine months after George W. Bush took office." So Bush's goals "were no longer entirely appropriate. He continued to pursue his presidential campaign promises nonetheless."

Greenspan was intensely criticized for endorsing a large tax cut in 2001 in congressional testimony during the first weeks of the Bush administration. He notes that he was recommending any tax cut, even a smaller one proposed by some Democrats. He acknowledges that those who had warned him about the perception he was backing Bush's plan were right. "The tax-cut testimony proved to be politically explosive," he writes.

Yet, he adds: "While politics had not been my intent, I'd misjudged the emotions of the moment. … Yet I'd have given the same testimony if Al Gore had been president."

By the end of last year, Greenspan writes with some bitterness, Washington was "harboring a dysfunctional government. … Governance has become dangerously dysfunctional.""

Excerpted from The San Francisco Sentinel.


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