Success Book Reviews: Alan Greenspan's "Age of Turbulence"
Alan Greenspan’s book, The Age of Turbulence: Adventures in a New World
He saw the demise of both Communist central planning (the fall of the Soviet Union) and United States central planning (Nixon’s ill-fated wage and price controls); the spectacular recovery of Europe and Japan after World War II and the free-market miracle that transformed China from a backwater of poverty into the number-two economy in the world; the re-emergence of free-market economics in the 70s and 80s, as country after country abandoned their disastrous flirtations with centrally planned economies,
and he courageously communicates the somber truth that great economic success requires risk, and when there is risk, there is loss as well as gain.
More sweeping (because of its truth) than an Ayn Rand Novel, the characters in Greenspan’s magisterial narrative are not fiction: Rand herself, Brezhnev, Gorbachev, Nixon, Ford, Reagan, Deng Xiaoping, and all the rest, are the real embodiments of the forces surging around this magnificent life. And at the dead-center bull’s-eye of the second half of the Twentieth Century, the most ebullient expansion of human prosperity in the history of mankind, sat Alan Greenspan. As first the outstanding student, then outstanding mentee, then, for decades the ultimate insider, as well as laser-sighted observer of towering analytical ability, and as a communicator who could actually talk to politicians and (wonder of wonders) get through to them, Greenspan had no peer.
And the cornerstone for each of these roles was one word: results. Greenspan got results. He did “it” (as Art Williams might say). The “it” was whatever it took to understand the problem whether it was saving an economy or forging the safety of Social Security. What were not innate skills, he learned. He was willing to listen to a Rand, a Burns, a Baker. Part of his genius was knowing what he did not know, and getting that new knowledge into his knowledge base. He talks with deep gratitude of Fed staffers who would tutor him in arcane banking lore, who would collate and feed him the best academic papers, who would do the studies that he needed to do his work. He praises the great political compromisers who helped him save Social Security, and extols the greatness of a truly “normal” guy, the deeply loved President Gerald Ford.
Since this is a blog about success, what can we learn about Greenspan that can help us even a little bit in our success journey? Not surprisingly, there are some clues.
1. One thing that we can admire, though not duplicate, is innate ability. Greenspan had an innate gift for mathematics, statistics, and code (which would translate into music as well as computer programming). These skills are also hallmarks of Jewish children, who for generations memorized and studied the Talmud (although Greenspan does not overly emphasize his Jewish heritage). Interestingly, Greenspan describes an optimistic mother, and a somewhat distant stockbroker father, who was also an author. One is struck by the sense that there was no parental negativity or neurosis to get in the way of Greenspan’s growth. The mother was cheerful, the father was not around to fight Oedipal battles with. Also, the father had written a book dedicated to Greenspan, and it is curious that Greenspan explains his early rise to fame through his ability to write prolifically and thus find an audience for his output. It is also interesting that he would be asked to demonstrate his mental math skills at family gatherings, thus already imprinting the idea that these skills could be the route to success.
2. Location and demographics. New York was becoming the center of the world during and after World War Two. It was the stage on which American success was played out. I have elsewhere reviewed books about Andrew Grove and Sandy Weill, (who also had a distant father, which may have allowed his ego strength to flourish) both of whom (besides being Jewish) were intellectually enraptured by New York. The lesson: go where the epicenter of success lies, or, as Ben Stein says: the prizes are only handed out if you are playing at “the table” (the stage upon which the big stakes games are played). Now, in the 1940s, Alan Greenspan did have some luck: as he was denied the opportunity to go to war, he was able to build his career earlier than those returning from overseas, and thus had a head start on his generation. And his generation was a lot smaller than the baby boomers. And, as a young man, he already knew Paul Volcker, Arthur Burns, and not much later, Cheney and Rumsfeld. As Ben Stein has recounted, people don’t hire the best people, they hire the best people THAT THEY KNOW. So, as his small, tight-knit cohort moved up the ranks, they hired the best person they knew: Greenspan.
3. As I wrote in “Follow your Bliss off a Cliff” , one should seek the interface between your skill set and what the Universe wants you to do. For Greenspan, when the phone rang, it was not for his Julliard clarinet playing, it was for his business analysis skills. He was smart enough not to fight it.
4. Learn from those with complementary skills. He allowed Ayn Rand to awaken a thirst for knowledge outside of the realm of pure numbers, clearly learned more of the art of compromise and group leadership from the heavy hitters in the Reagan administration, and may have learned “power networking” strategies from the glittering, brilliant, and highly-connected women in his life, notably Barbara Walters and Andrea Mitchell (his current wife).
5. Like Charlie Munger, much discussed in this blog, Greenspan recognized, and constantly deepened his “circle of competence” . As the consummate “Mr. Inside” he did not attempt to be “Mr. Outside”. No Greenspan talk shows. No Greenspan self-help books. No Greenspan golf tournaments. And thus, precious little conflict of interest . No “going Hollywood” and betraying the inner circle.
6. Another key cornerstone is epitomized in the decision-tree topic of “MiniMax regret”. What that means is, Greenspan would sometimes search for the alternative that might best minimize the most future regret. As the Hippocratic Oath recommends: “first do no harm”. In other words, consider multiple scenarios and don’t just pay attention to the upside. Many broke traders might do well to listen carefully.
7. Lastly, Greenspan knew how to keep his mouth shut, a technique recommended at least since the time of Benjamin Franklin. Reports from his Ayn Rand days tell of Greenspan’s habitual silence, and he himself mentions that playing cards “close to the vest” is a hallmark of central bankers.
This book is many things. A chronicle of a life. A chronicle of an age. A chronicle of personal, national, and ideological success. It may well end up as one of the most important historical narratives of the second half of the Twentieth Century. We now, all of us, live as kings, taking for granted plentiful food, abundant opportunities for advancement, long life, warmth, technological wizardry and even multiple means of safeguarding our future financial security. We owe all of this abundance to free-market Capitalism, for the Market is indeed a more miraculous than any fabled Genie, Indeed, under Capitalism, our wishes, not limited to the storied three, nay, even three hundred, actually, miraculously, create their own fulfillment.
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