. . . crisis or dropping markets were blessed with lower interest rates and money injections which took out all the pain and offered new opportunities. The 1987 crash? Forgotten in a few months of cheap money. The 1998 Asian crisis? Forgotten in a few months of cheap money? The 2001 dotcom bubble? Forgotten in a few months of cheap money? 9/11? a second opportunity in the same year to open up the money taps.

I'm not sure what else you would have had Greenspan do in these situations. I would argue that we were pretty lucky not to fall into a severe financial crisis and recession (or worse) in 1987 and 1998, and much of the reson we didn't was Greenspan's flooding the financial markets with liquidity in order to stop any potential panic (learning the lessons of the Great Depression, you might say). So far it's worked out pretty well. Can we really blame some future crisis on Greenspan's monetary policy of 1987 or 1998?

Seriously, would you have had Greenspan follow a policy of higher interest rates? Let's be clear about what that means -- slower growth, more unemployment, slower wage growth, more pressure on welfare states, more pressure to free business to impose all the costs of such policies on workers, in order to keep profits up, etc., etc.

(2) Volcker

Greenspan has not been a good central banker, like Volcker was. Volcker was respected, but hated, because he brought inflation down by imposing pain on everybody.

Imposing pain on everybody? I couldn't disagree more on this. Volcker's (and his British Thatcherite counterparts) solution to inflation - sky-high interest rates, and a planned recession (the worst since the 1930s) - meant double-digit unemployment, little or no wage growth, and deindustrialization in both the UK and US. It certainly wasn't bankers and the rich who lost out.

Have you forgotten your own diaries on left vs. right and the economy?

Volcker's anti-inflation anti-worker monetary policy is responsible for a lot of that. Which economy would you rather work in? (unless you're a banker, of course :) )

I think you are far too harsh on Greenspan. His job is virtually impossible: he is supposed to keep inflation low and stable, smooth out recessions, keep an eye on the value of the dollar, watch out for financial bubbles (stock market, housing, etc), and react to stop potential domestic and international financial crises from getting out of hand, all with one little policy instrument -- the fed funds rate. It's too many unknowns and too few policy levers.

I am mostly in agreement with the articles - Greenspan has juggled those balls about as well as anyone could. Far better than the hairshirt-wearing Volcker. I like Greenspan's pro-growth bias. When just about every economist was telling him to raise interest rates because unemployment couldn't go below the "natural rate" of 6%, he ignored them and the result was the best economy for workers in a generation.

No, if there's a financial crisis it will not be all Greenspan's fault. U. S. and global financial markets are simply too lightly regulated for any central banker to do anything but respond to the excesses of financial capitalism run amok.