KEY POINTS:
The revered former Federal Reserve chairman Alan Greenspan lashed out against the Bush Administration at the weekend, accusing the White House and the Republicans in a new book of swapping "principle for power" and allowing fiscal policy to run out of control.
In a series of advance releases
and interviews before today's publication of a new memoir, Greenspan - a lifelong Republican himself - expressed his deep disappointment with the direction of United States economic policy over the past six-and-a-half years, saying he had initially looked forward to working with "old friends" he had known since the Ford Administration in the 1970s, only to see them "veer off in unexpected directions".
He was referring, in particular, to Vice-President Dick Cheney and former Defence Secretary Donald Rumsfeld, who were key aides to President Ford when Greenspan served on the President's Council of Economic Advisers. His book, The Age of Turbulence: Adventures in a New World, further embarrassed them by insisting the Iraq war was largely about oil.
"Whatever their publicised angst over Saddam Hussein's 'weapons of mass destruction', American and British authorities were also concerned about violence in an area that harbours a resource indispensable for the functioning of the world economy," Greenspan wrote.
"I'm saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."
US Defence Secretary Robert Gates rejected the statement, saying the war was driven by the need to stabilise the Gulf and put down hostile forces.
Appearing on ABC's This Week, Gates said, "I have a lot of respect for Mr Greenspan." But he disagreed with his comment about oil being a leading motivating factor in the war.
In a Washington Post interview, Greenspan clarified his comment. He said he told the White House before the Iraq war that removing Saddam was "essential" to securing world oil supplies.
He said in the interview held yesterday that while securing global oil supplies was "not the Administration's motive", he had presented the White House before the 2003 invasion with the case for why removing the Iraqi leader was important for the global economy.
"I was not saying that's the Administration's motive," Greenspan said. "I'm just saying that if somebody asked me, 'Are we fortunate in taking out Saddam?' I would say it was essential."
Greenspan's core criticisms, though, were of the Republican-controlled Congress, which allowed a budget in surplus at the end of the Clinton Administration to give way to runaway deficit spending, and of a White House that did not veto a single spending bill in six years.
"The Republicans in Congress lost their way," he wrote. "They swapped principle for power. They ended up with neither." Of last November's congressional elections, in which the Republicans lost control of both the House and Senate, Greenspan added: "They deserved to lose."
Of the advent of the Bush Administration in 2001, he wrote: "I looked forward to at least four years of working collegially with many of the Government's best and brightest men, with whom I had shared many memorable experiences. And on a personal basis, that is how it worked out.
"But on policy matters, I was soon to see my old friends veer off in unexpected directions."
GREENSPAN ON THE US PRESIDENTS
GEORGE BUSH SNR
"Great things happened on George Bush's watch: the fall of the Berlin Wall, the end of the Cold War, a clear victory in the Persian Gulf, and the negotiation of the Nafta agreement to free North American trade. But the economy was his Achilles heel, and as a result we ended up with a terrible relationship."
BILL CLINTON
"Clinton was often criticised for inconsistency and for a tendency to take all sides in a debate, but that was never true about his economic policy. A consistent, disciplined focus on long-term economic growth became a hallmark of his presidency."
ON THE CURRENT BUSH ADMINISTRATION
"I was a different person than I had been when first exposed to the glitter of the White House a quarter-of-a-century before. So were my old friends: not in personality or character, but in opinions about how the world works and ... what is important."
- Independent, additional reporting Reuters