The dour Fed chief has had an awfully nice run. For the last few years, he's been feted as the crown prince of prosperity, treated as though his accountant's mug should be chiseled on Mount Rushmore, and given the ultimate media accolade: a hagiographic book by Bob Woodward.
Well, Alan, all good things must come to an end. As the economy heads south, Greenspan will become the great goat of the recession. He got way too much credit for the good times, and he will get way too much blame for the bad times. In other words, Alan, the way up and the way down are the same.
There's that old sports adage, "Today's hero is tomorrow's goat." Bill Clinton, are you listening? The media and public opinion can turn on a dime — or, in Clinton's case, on Denise Rich's dime. For the longest time, Tom Cruise was the movie star as mensch — soon, he will be seen as a self-absorbed home-wrecker. Tom, the way up and the way down are the same. And when you're falling, it's Mission Impossible to right yourself.
Heraclitus knew that the things we might prize on the way up have no value when you're on the way down. And vice-versa. Has a movie star ever rebuffed publicity when he or she was on the way up? Madonna, now the mistress of privacy, posed in the buff on Sunset Boulevard when she was the princess of publicity. A few months ago, she wouldn't even pose in her white wedding dress.
In a curious way, George Bush has benefited from Heraclitus's dictum. Because he was consistently underestimated and was prematurely dismissed as a bumbling empty suit, his stock rose when he managed to string a couple of sentences together. He was on the way down; now he's on the way up.
There used to be a feature in the old Spy Magazine — a feature I used to occasionally write — called "Downhill from Here." The idea was that it was a portrait of some celebrity or public figure just a smidgen past the zenith of their fame, and how they were just about to start their descent. Bill Clinton is slaloming downhill fast; Alan Greenspan is about to start slouching toward the valley.
One reason we praise and blame with such vehemence is because of what sociologists call "correspondence bias," which is our tendency to attribute the cause of events to individual human actions. Thus, we say that Alan Greenspan spurred our prosperity when in fact it was a myriad of different circumstances almost all of which he had absolutely no control over. It is our tendency to believe Carlyle's wrong-headed Great Man theory of history, which is that great men make history, not that history makes great men — or women (he wrote in the 19th century). Our modern version of this is Carlyle-lite: we think the world revolves around celebrities. But I'm telling you know: history makes individuals seem outsized; there are no outsized individuals who really make history. It's just our tendency to give them credit.
Thus, Alan Greenspan did not make our economic expansion, our economic expansion made Alan Greenspan. And as long as we were giddily expanding, so was Alan's reputation. But the minute the economy started to sputter, Greenspan started to get the blame. Some but not all of which he deserves.
Alan, it's all downhill from here, my friend.