http://online.barrons.com/article/SB120675340444773623.html?apl=y
SATURDAY, MARCH 29, 2008
Dr. Greenspan's Amazing Invisible Thesis
By JIM MCTAGUE
IN ALL LIKELIHOOD, ALAN GREENSPAN has more honorary Ph.D.s than any living
economist, which is no mean feat -- regardless of the chortling chorus of
critics who suggest he played midwife to the first great economic crisis
of
the 21st century and thus is overly lionized as a financial genius. He has
honorary degrees enough to fill a fair-sized wall, including parchment
from
Yale, Harvard, Notre Dame, Colgate, Wake Forest, Pennsylvania, Edinburgh
(Scotland). The Doctor-Doctor also received an honorary knighthood in 2002
at Balmoral from Queen Elizabeth II. Sorry to say, this accolade did not
come with a suit of armor.
Greenspan, who left the Fed in 2006 but is still consulted as a genius,
might find a metallic exoskeleton exceptionally comforting come May, when
the University of Texas Press publishes an unflattering book by Robert
Auerbach entitled Deception and Abuse at the Fed: Henry B. Gonzalez
Battles
Alan Greenspan's Bank.
Auerbach, a veteran Fed basher, portrays Greenspan as a real-life
Professor
Marvel -- who, through double-talk or "garblement," transformed himself
into
a mighty economic wizard à la Oz. Auerbach strongly implies that
Greenspan's
1977 Ph.D. from New York University was obtained in a few months with
little
more rigor than a matchbook-cover art degree and that Greenspan has kept
his
Ph.D. thesis secret in order to protect his vaunted academic reputation.
Although Auerbach's evidence is circumstantial, it certainly is
provocative.
For years, NYU told the public that, at Greenspan's request, the thesis
was
locked away from public view in a vault at its Bobst Library. Auerbach
himself was told this in January 2004 when he tried to obtain a copy.
"Normally," writes Auerbach, "a Ph.D. dissertation in a field such as
economics must be in a form sophisticated enough to be usable in research,
must make a contribution to the existing body of knowledge, and must be
original, unpublished work. When approved, the Ph.D. candidate is normally
required to supply a bound copy of the dissertation, which remains in the
university's library and is available for future researchers to consult."
Auerbach, who has a Ph.D. in economics from the University of Chicago
(Nobel
laureate Milton Friedman was his thesis adviser), kept requesting access
to
the papers until NYU's provost, David McLaughlin, finally admitted in
August
2005 that, "I can tell you that it was the practice of the business
school,
during the 1970s, not to deposit dissertations with the library. Thus, a
copy of Greenspan's dissertation is not in the Bobst Library. We suggest
that you contact Greenspan directly in order to obtain a copy of his
dissertation."
Writes Auerbach: "Evidently, he wanted me to believe that NYU business
Ph.D.s just took their dissertations home and put them in a drawer."
Auerbach says in a footnote that he made no request to Greenspan for a
copy
because "the publication of a scholarly addition to existing knowledge is
the obligation of the university and the Ph.D. candidate."
Barron's is not bound by such academic niceties and requested a copy from
Greenspan, as well as a response to Auerbach's assertions. The Maestro's
spokeswoman told us that his busy travel schedule precluded him from
getting
back to us in time for our deadline. As for two inquires to the provost,
they went unanswered.
Greenspan, writes Auerbach, obtained his NYU doctorate in a few months, 27
years after earning a master's there. He had just completed a stint as
chairman of the Council of Economic Advisers for both presidents Nixon and
Ford, when inflation went wild. His performance hardly suggested that he'd
one day become a legendary Fed chairman.
Exactly how Greenspan wrapped up his NYU studies in such a short period is
unclear, but it appears that his thesis wasn't especially time-consuming.
Auerbach cites an earlier biography that says that Greenspan submitted --
instead of a normal Ph.D. dissertation -- some papers totaling 176 pages
that he entitled Papers on Economic Theory and Policy. Among them was at
least one he'd written earlier.
Greenspan and Auerbach, as you have gathered, hardly are boon companions.
Auerbach was an aide to Henry Gonzalez when the quixotic Texas Democratic
populist, who chaired the powerful House Banking Committee, decided to
make
the Federal Reserve more accountable to the taxpayers. (Full disclosure:
Auerbach has been a source for this writer for years, and writes kindly of
me in the book.)
The Fed, which considers itself as sacrosanct as the Supreme Court,
treated
Gonzalez at best as a mere nuisance and at worst as a garrulous fool.
In the end, the institution paid a steep price for its arrogance:
Gonzalez,
who is dismissed in a few lines in Greenspan's recent memoirs, discovered
heaps of dirty laundry, including the then-Fed chief's infamous 1993
attempt
to mislead the Banking Committee about the existence of detailed
transcripts
of 17 years' worth of Federal Open Market Committee meetings.
Auerbach contends in his book that Greenspan's invisible Ph.D. thesis is
symbolic of a career marked by prevarication, cover-ups and a general
aversion to making the Fed more publicly accountable. He calls on Congress
to "bring the Fed into the Democracy" because "unelected Fed decision
makers
should not decide what the public should know about how they are running
the
central bank."
Unlike Greenspan, Auerbach writes: "No one should be given the immense
powers bestowed on the Board of Governors and the FOMC without having his
or
her credentials publicly examined."
If only Greenspan's thesis were available to examine.
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