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‘Meet the Press’ transcript for Sept. 23, 2007
MR. GREENSPAN: No. Shall I explain? First of all, I did make a speech in February of 2004 in which I explained a fairly interesting analysis by the Federal Reserve staff which said that there were a lot of, a lot of home buyers who would do far better were they to take adjustable-rate mortgages, because they weren’t going to live in the home long enough and the price they were paying to get the fixed-rate mortgage was exceptionally high. Now this, incidentally, was not subprime, this was prime adjustable rates. A week later I shows up—show up at the Economic Club of New York, and, with a thousand people asking me all sorts of questions—I shouldn’t put a thousand, a thousand people there and a couple people asking me questions, the question that came up right at the top, “Are you, in this—in this day, disparaging the 30-year mortgage?” Because the issue was that vs. adjustable rate. And I said, “No, on the contrary. When I take out a mortgage, I take out a 30-year fixed-rate mortgage.” I was referring to a special, small category of people. But it had nothing to do with subprime.
But with the whole housing boom, we’re dealing with a world problem. More than two dozen, two dozen nations are experiencing exactly what we are experiencing. In fact, our housing price boom is less than the average, and this is very clear—this very clearly calls for a global explanation, not for an individual explanation of what central banks do. And, indeed, central banks around the world have largely lost their power to affect long-term mortgage rates because it’s global forces which are pushing it, and we proved it. We tried to raise the rate in 2004 and we failed. We tried again in 2005 and we failed. And so it’s very clear to me that central banks, ourselves, the Federal Reserve, included, had very little control over the extent of that boom.
MR. RUSSERT: Another comment in your book has caused a lot of debate, and here it is: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” You were asked about that on the “Today” program, and this is how you answered.
(Videotape, “Today”)
MR. GREENSPAN: I was expressing my view. Saddam Hussein was obviously seeking to get a chokehold on the Straits of Hormuz, where about 18 million barrels a day flow from the Middle East to the industrial world. Had he been able to get ahold of a nuclear weapon and indeed move through Kuwait and into Saudi Arabia and control the Straits of Hormuz, it would’ve caused chaos.
(End videotape)
MR. RUSSERT: What evidence was there that Saddam Hussein had acquired or was trying to acquire a nuclear weapon, or was trying to get a chokehold on the Straits of Hormuz?
MR. GREENSPAN: There was no evidence he had a nuclear weapon because, my judgment is, he would’ve expressed that he had it and that would’ve created a real problem. You have to watch that man over 30 years. First of all, let me just say that it’s very clear, if there were no oil under the sands of Iraq, he would never have gotten the wherewithal, the resources to effectively threaten his neighbors and essentially potentially threaten the rest of the world through a global shortage of oil, which he could’ve done. The evidence I have is I watched him, one, come up against Iran but moving on Kuwait, threatening Saudi Arabia. And what his actions, as I observed them year after year, conclude, led me to conclude, he was clearly trying to get control of Middle East oil. Now, the thought of him in control of Middle East oil and then, with his resources, being able to buy a nuclear device, I found scary. And, indeed, having him out of power was critical to me. Whether he was deposed by internal means or by war or anything was less important to me than he left.
MR. RUSSERT: Do you believe the United States should take pre-emptive military action against people who could disrupt our economy?
MR. GREENSPAN: I think that is a very significant moral problem which we all confront, and, indeed, we had that in spades during the Cold War when there was this major debate which went on about, you know, if you see a missile coming at you, before you can know whether it is really going to create a problem, do you launch a retaliatory attack? For a democratic society, for one in which civil liberties are so critical to us and individual freedoms, the thought of pre-emptive war is anathema. And yet people have to consider what would we do? And I don’t know the answer to that. I don’t know of anyone who really has an effectively scripted answer to that.
MR. RUSSERT: Your book has generated response from the president, has generated an op-ed piece from the vice president saying that you’re off the mark. Has your book—how has your book affected your relationship with people you’ve worked for?
MR. GREENSPAN: Not to any significant extent because I haven’t had contact with a lot of people since I’ve made a number of my remarks. But nothing of what I said could come as a surprise to anybody.
MR. RUSSERT: You have worked for a lot of presidents. Who was the smartest?
MR. GREENSPAN: It’s a toss-up between Bill Clinton and Richard Nixon. They both had—they were both extraordinarily intelligent. The one thing, however, that Clinton did which I just found awesome was he went before, he went before the Congress in his State of the Union message and somebody put the wrong speech in the TelePrompTer, and for, I don’t know anybody who knew the difference. And I’m telling you, that requires a degree of intellectual capabilities which is awesome.
MR. RUSSERT: Who was the most profane?
MR. GREENSPAN: Richard Nixon, by multiple quantities.
MR. RUSSERT: Who was the most normal?
MR. GREENSPAN: Gerald R. Ford, the most decent man—one of the most decent people I ever met.
MR. RUSSERT: Who was the most—who was the least knowledgeable about economic matters?
MR. GREENSPAN: I would say they were all, to a greater or lesser extent, fairly knowledgeable. There was no—none of the presidents that I worked with was uninformed about most of the key issues in economics.
MR. RUSSERT: Who put the most political pressure on you?
MR. GREENSPAN: George H. W. Bush.
MR. RUSSERT: Before we go, I was quite taken by the passage in the book about my colleague, Andrea Mitchell, and your first date. Here’s Andrea and Alan at the Kennedy Center Honors. And this is what you wrote about your first date. “Finally when the holidays arrived, we scheduled a date for December 28, 1984. It was a snowy night. It might not be everybody’s idea of first-date conversation, but at the restaurant we ended up discussing monopolies. I told her I’d written an essay on the subject and invited her back to my apartment to read it. We did go to my apartment,” “I showed her this essay I’d written on antitrust for Ayn Rand. She read it, and we discussed it.” Do you often lure women back to your apartment by saying, “You want to see my essay”?
MR. GREENSPAN: I didn’t have any sketchings or etchings.
MR. RUSSERT: It all worked out.
MR. GREENSPAN: It worked out, indeed.
MR. RUSSERT: Andrea Mitchell and Alan Greenspan, together. Must have been one, one hell of an essay.
MR. GREENSPAN: It...
MR. RUSSERT: Mr. Chairman, we thank you for sharing your views.
MR. GREENSPAN: Thank you.
MR. RUSSERT: And you can hear more about that romantic first date about antitrust monopolies with NBC’s Andrea Mitchell. She’s going to join Alan Greenspan right here for our MEET THE PRESS Take Two Web Extra on our Web site this afternoon, mtp.msnbc.com. And you’ll find out what Fidel Castro says about Chairman Greenspan as well. We’ll be right back.
(Announcements)
MR. RUSSERT: That’s all for today. Watch MSNBC Wednesday night. I’ll be moderating the Democratic presidential candidates’ debate at Dartmouth College in New Hampshire, Wednesday night, 9 PM on MSNBC.
We’ll be back next week. If it’s Sunday, it’s MEET THE PRESS.
Tomorrow night is family day. If you have dinner with your kids five times a week, they’re less likely to drink, smoke or use drugs. It’s amazing research. Have dinner with your kids.
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