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Greenspan memoir links Iraq war to US thirst for oil
WASHINGTON (AFP) - Former Federal Reserve chairman Alan Greenspan, for years an inscrutable seer on the economy, is causing a stir by alleging in his new memoir that "the Iraq war is largely about oil."
Greenspan, who as head of the US central bank was famous for his tight-lipped reserve, is uncharacteristically direct, also accusing President George W. Bush of abandoning Republican principles on the economy.
"I'm saddened that it is politically inconvenient to acknowledge what everyone knows -- the Iraq war is largely about oil," he wrote in reported excerpts of "The Age of Turbulence: Adventures in a New World," which is set for release on Monday.
However in an interview with The Washington Post, Greenspan clarified that while securing global oil supplies was "not the administration's motive," it had presented the White House with an opportunity to make the case that removing Saddam Hussein was important for the global economy.
"I was not saying that that's the administration's motive," he said in the interview. "I'm just saying that if somebody asked me, 'Are we fortunate in taking out Saddam?' I would say it was essential."
Greenspan's memoir appears 18 months after he left the Fed, following a career that spanned 1987 to 2006, with the US economy at a crossroads and ahead of a critical central bank meeting under the chairmanship of his successor, Ben Bernanke.
The man dubbed "The Oracle" tells his own tale of nearly two decades at the helm of one of the world's most powerful financial institutions and includes surprising swipes at the Bush administration.
US Defense Secretary Robert Gates, while explaining his "respect" for Greenspan, rejected the charge that a thirst for crude explained the decision to invade Iraq in March 2003.
"I know the same allegation was made about the Gulf War in 1991, and I just don't believe it's true," he said on ABC television Sunday.
Members of the US Congress, who by a broad majority also voted to authorize the use of military force against Iraq, also dismissed Greenspan's assertion.
"I don't believe that 77 United States senators on a broad, bipartisan basis would have authorized the use of force ... if it was only about oil," Republican senator John Cornyn told CNN.
Greenspan, a lifelong Republican, writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress.
According to The Wall Street Journal, he says that Bush's failure to do so "was a major mistake."
Republicans in Congress, he writes, "swapped principle for power. They ended up with neither."
"They deserved to lose" in the 2006 elections when the Democrats retook control of Congress, he adds.
A speech by the 81-year-old Greenspan is said to command more than 100,000 dollars, and he reportedly earned an 8.5-million-dollar advance from Penguin Press for the book.
In the bombshell memoir, he puts his own spin on the events surrounding the 1987 stock market crash, the bursting of the Internet bubble and the 2001 recession coinciding with the September 11 terror strikes.
In a blog on the online bookstore Amazon.com, Greenspan says he will share details of his childhood in New York, his years as a jazz musician and his friendship with US presidents.
"After years of talking 'Fedspeak' in carefully calibrated congressional testimony, I could finally use my own voice," Greenspan says with uncharacteristic verve.
"I tackled the personal part first, but then started unraveling the detective story about the economy," Greenspan adds in his blog. "What did all the economic shifts we began to detect in the late 90s mean?"
His memoirs are due out just as the institution he led for so many years holds its most anticipated meeting in years.
On Tuesday, investors around the world will be closely watching the Fed for some sign that might help counter the effects of a US mortgage crisis that has rattled markets and led to a credit squeeze.
Greenspan is increasingly being blamed by some for the crisis. By keeping interest rates so low for so long, some argue, he helped foster the real estate bubble behind much of the current woes.
The former Fed chief said the fall in US housing prices triggered by the subprime credit crisis would likely be bigger than expected.
The drop in property prices "is going to be larger than most people expect," Greenspan told the Financial Times, adding that he would not be surprised if the percentage decline in the United States ended up being "in double digits."
Abu ‘Amrullah Muhammad ibn Ishak El Merbawiy
17 September 2007/ 5 Ramadhan 1428H