Alan Greenspan is one of America’s most famous economists. He was Chairman of the Board of Governors of the Federal Reserve from 1987 to 2006, and is a self-described “libertarian Republican.” In his own words, “I was brought up in the Republican Party of Goldwater. He was for fiscal restraint and for deregulation, for open markets, for trade. Social issues were not a critical factor.”

This stance on markets, trade, and economic freedom contributed to a period of unprecedented US economic growth, which sparked an historical march towards freedom across the globe and a prosperity never before seen.

In the US, nominal per capita GDP compound annual growth rates were 8.32% between 1980 and 2006, with a real GDP equivalent over the same period of 3.24%*. The previous 16-year period from 1964 through 1980 has a similar nominal value of 8.21%, but a significantly smaller real equivalent of 2.34%. This seemingly innocuous variance equates to a whopping 38% increase in real per capita GDP growth since Ronald Reagan brought the ideology of free markets to the federal government. Alan Greenspan was the monetary policy executor of this ideology.

The Republican Party was largely responsible for this ideological shift in government, but certain Democratic Party administrations and elected officials certainly contributed to the movement. Despite this legacy, Greenspan voices disillusion with the Republicans of today, as well as Democrats. The Republican Party, he argues, has moved away from the policies that have brought prosperity.

“The Republican Party, which ruled the House, the Senate and the presidency, I no longer recognize. It’s fundamentally been focusing on how to maintain political power, and my question is, for what purpose?”

He is no less critical of Democrats, “The Clinton administration was a pretty centrist party, but they’re not governing again. The next administration may have the Clinton administration name but the Democratic Party…has moved…very significantly in the wrong direction.” This is referring to the Democratic Party’s populist bent, especially its skepticism of free trade.

In an interview with the Wall Street Journal Greenspan offers a dismal reflection of the state of politics in this country, “I’m saddened by the whole political process, and it’s not an accident that Republicans deserved to lose in 2006 — it wasn’t that the Democrats deserved to win. When it came time to rule, all of a sudden their ratings collapsed, and the reason they collapsed is they’re just as negative as the Republicans.”

When asked how he will vote in the 2008 Presidential Election, Greenspan cannot muster a conclusive answer, “I doubt if I would vote Democrat. I just may not vote. At the moment it’s extremely hard to say.”

If this is the reaction of one of America’s most respected economists, how are the rest of us supposed to feel about our government? When will a politician rise who has the courage to tell the American people the status quo is not acceptable, socialism is wrong, the political process should not be one of brokering power for the sake of it, and freedom is more than just a punch line!

*Economic statistics derived from http://eh.net/hmit/gdp/.

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