BOOK EXTRACT
she thought) to the wife of a British newspaper owner. But on her third evening in Washington, Thatcher appeared at a British embassy dinner in a black velvet evening suit and spoke from the heart about free markets and liberty. To a certain type of listener, she was more rousing by far than any British leader since Churchill. One such listener was sitting right beside her. As the senior member of the Ford administration at the British embassy dinner, the chairman of the Council of Economic Advisers had been placed next to Thatcher, and she wasted no time in getting to the point with him. “Tell me, Chairman Greenspan,” she asked, “why is it that we in Britain cannot calculate M3?” It was an unusual dinner-party icebreaker. M3 was a broad measure of the money supply that counted deposits at S&Ls as well as bank deposits and cash; and quite apart from its arcane nature, the timing of this question was remarkable. Central banks had only just begun to publish monetary measures, and the Fed would not commit itself firmly to a money-supply target for another four years; to know about M3 in the fall of 1975 was to belong to a rarefied club of hard-money believers. But, however unlikely her question, Thatcher had unlocked her shy neighbour. For the rest of the evening, the two got along famously. After the dinner, Greenspan made the short trip from Embassy Row on Massachusetts Avenue to his apartment at the Watergate. Kaye Pullen had let herself in and was waiting for him in the bare living room – Alan had done nothing to make the place feel like home, though by now this had less to do with the fiction that he might resign his job than with his serene indifference to interior decoration. Kaye was used to this routine by now, getting together with Alan after an evening spent separately; although they had been dating for eight months, they were not officially a couple in the eyes of InBUSINESS | Q4 2016
044 InBusiness Q4 2016_Book Extract.indd 45
“IT SOON
BECAME CLEAR WHY ALAN WAS
AGITATED. IT WAS NOT WHAT HE
HAD DRUNK; IT WAS WHOM HE HAD SAT
NEXT TO. IMAGINE, MARGARET THATCHER
This is an extract taken from The Man Who Knew: The Life and Times of Alan Greenspan, reprinted with permission from Bloomsbury.
Washington. But on this particular evening, she could tell that something out of the ordinary had happened. Alan was acting oddly, and for a moment she wondered whether the ambassador’s butler had slipped him an extra gin and tonic. On further reflection, she realised that this theory was implausible: Alan’s relationship with alcohol was as proper and controlled as his relationship with people. In all their months together, there had been just one occasion when Alan had ordered so much as a single drink at lunch – they had been eating at the White House mess, and Alan had broken with habit by asking for a beer to go with the Mexican food on that day’s menu. But even this not terribly wild impulse had soon been squashed. Seeing Arthur Burns take a seat nearby, Alan had summoned the waiter back to his table and quietly told him that there would be no beer after all. Alan and Kaye talked – it was the usual evening debriefing – and it soon became clear why Alan was
HAD ASKED ABOUT M3!”
agitated. It was not what he had drunk; it was whom he had sat next to. Imagine, Margaret Thatcher had asked about M3! An obscure measure of the money supply embraced by followers of Milton Friedman! Which American leader would have heard of such a thing, let alone admit to an interest in the midst of a grand dinner party? After that get-to-know-you opener, Mrs. Thatcher had engaged Alan in a debate about market economics and the problems of the West: she talked like Ayn Rand, but she was likely to become the next prime minister of Britain. Forced to choose between his libertarian principles and his urge to be at the center, Greenspan was capable of tempering his views, as his advice on Ford’s tax rebate had demonstrated. But in his ideal world, Greenspan would be both a faithful libertarian and an influential power player – and sitting next to Thatcher had allowed him to dream that this combination might be possible. Kaye had seldom seen Alan so excited. 45
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