A lengthy November 2004 Journal profile, headlined “The Navigator,”(1) for instance, mentions Iraq only in passing:
In 2003, when the Iraq war and threat of deflation hung over the economy, the Fed cut rates again. By June 2003, the Fed’s key rate was at one percent, the lowest in 45 years.
A Washington Post story in May 2004 moved a bit closer to the truth, noting (2) that Greenspan visited the second Bush White House more frequently than he did Clinton’s, primarily to discuss foreign policy and the economy:
But Fed spokeswoman Michelle Smith said Tuesday that Greenspan met with administration foreign policy officials to discuss international economic policy. Particularly since the U.S. invasion of Iraq last year, Middle East instability and its potential effects on the world oil supply have been key concerns. Another frequent topic is the interplay of economic and foreign policy issues in many areas.
At most, though, Greenspan was portrayed as allaying fears that a war would derail the economy—pretty much what you’d expect the Fed chairman to concern himself with. Here’s an April 2003 New York Times story on Greenspan agreeing to serve a fifth term as Fed chairman:
He also labored mightily to make himself indispensable. In the days leading up to the war with Iraq, he met repeatedly with top White House officials and gave his tacit blessing to the venture both in public and in private.
A widely acknowledged expert on the oil industry, Mr. Greenspan let it be known that he was not overly worried that the war would cause permanent disruptions to the oil market. Nor did he raise warnings about the financial cost of the war at a time when the federal budget had already run up big new deficits.
But giving “tacit blessing” and being a “behind-the-scenes advocate” is entirely different.
Mostly, though, business-press readers over the years heard that Greenspan was ready to act if the war required it, as the Journal wrote as the war appeared imminent:
Fed Girds for Interest-Rate Cuts as War Scenarios Unfold
This is not so much a criticism of the Journal as a public service to Audit Readers: No, you didn’t miss something. That the then-Fed chairman advocated behind the scenes for the Iraq War is indeed new information. It’s news.
1. Greenspan’s Legacy —- The Navigator — Fed Chief’s Style: Devour the Data, Beware of Dogma —- As Retirement Looms in 2006, Greenspan’s Strong Record Will Be Hard to Replicate —- Did He Help Create a Bubble?
18 November 2004
The Wall Street Journal
2. A More Frequent Visitor; Greenspan’s White House Trips Increased Sharply in Recent Years
Washington Post Staff Writer
27 May 2004
The Washington Post
3. Greenspan Agrees To Another Term Leading the Fed
The New York Times
April 24, 2003