Greenspan Faults Bush Over Spending

President Bush names his top economic adviser, Ben Bernanke, right, to become the new chairman of the Federal Reserve Board, replacing Alan Greenspan, left, in the Oval Office at the White House in Washington in this Oct. 24, 2005 file photo. Greenspan, in his upcoming book, bashes President Bush for not responsibly handling the nation's balance sheets and racking up big budget deficits. (AP Photo/J. Scott Applewhite, File) (J. Scott Applewhite - AP)

"Tax cuts contributed a portion to early deficits, but those tax cuts accelerated growth over time," Fratto said. He added: "We're not going to apologize for increased spending to protect our national security."

Greenspan said he was surprised by the political grip that Bush exerted over his administration.

The Bush administration turned out to be different from "the reincarnation" of the Ford administration that Greenspan said he had imagined. "Now the political operation was far more dominant." Greenspan was chairman of the Council of Economic Advisers under President Ford.

Greenspan enjoyed a good relationship with Bush's predecessor, Bill Clinton, "a fellow information hound."

They also were on the same economic page. During the Clinton administration, budget deficits turned to surpluses.

Greenspan recalled a conflict with the White House when Bush's father was president. The elder Bush wanted lower interest rates and challenged Greenspan's inclination to raise them because of inflation risks.

For Bush's father, the economy was his "Achilles' heel, and as a result we ended up with a terrible relationship." The economy went into a recession in the summer of 1990 and emerged from it in the spring of 1991.

Many supporters of the elder Bush blamed Greenspan's tight-money policies for the recession that contributed to Bush's loss to Clinton.

Greenspan says in the book he does not lament the loss of America's manufacturing base.

"The shift of manufacturing jobs in steel, autos and textiles, for example, to their more modern equivalents in computers, telecommunications and information technology is a plus, not a minus, to the American standard of living," Greenspan wrote.

Greenspan's memoir includes his early years growing up in a New York City neighborhood of low-rise brick apartment buildings filled with families of Jewish immigrants, his stint as a jazz musician and his decades as a Washington policymaker.

On other topics, Greenspan:

_ Says he believes looser mortgage terms for "subprime" borrowers _ those with spotty credit histories or low incomes _ raised financial risks. However, he says the benefit of expanded home ownership in the United States was worth the risk.

_ Questions whether global powerhouse China can continue its economic successes over the long run if it doesn't incorporate democratic processes. However, he predicts that if Beijing continues to move ahead on free-market principles "it will surely propel the world to new levels of prosperity."

_ Predicts the most important economic decision U.S. lawmakers and courts will confront in the next quarter century will be to clarify rules involving intellectual property _ patents, copyright and trademarks.

_ Proposes lowering barriers to skilled immigrants and improving education to narrow income inequality.