I HAVE not yet had an opportunity to read Sebastian Mallaby’s new biography of Alan Greenspan (pictured), The Man Who Knew. I have heard great things about it; you can read Martin Wolf’s review of the book in The Economist here. (Full disclosure: Mr Mallaby is a former Economist journalist and is married to our editor-in-chief, Zanny Minton Beddoes.) In reading coverage of the book, I have been intrigued by one of Mr Mallaby’s judgments of Mr Greenspan: that he was insufficiently committed to keeping control of asset prices. Mr Wolf quotes the book as follows:

The tragedy of Greenspan’s tenure is that he did not pursue his fear of finance far enough: he decided that targeting inflation was seductively easy, whereas targeting asset prices was hard; he did not like to confront the climate of opinion, which was willing to grant that central banks had a duty to fight inflation, but not that they should vaporise citizens’ savings by forcing down asset prices. It was a tragedy that grew out of the mix of...Continue reading