When Alan Greenspan retires as Federal Reserve chairman early next year, we can expect waves of adulation for his extraordinary eighteen-year reign over the American economy. The financial press is already offering nostalgic retrospectives on the highlights: the crash of '87 and rapid rebound, the chairman's total victory over price inflation, his swift interventions to avoid financial panics and to reverse the stock market's massive meltdown of 2000-01. In tempestuous times, this Fed chairman acquired a godlike aura--the inscrutable wizard with a nerdish charisma, his wisdom cloaked in financial doubletalk. How will the nation get along without him?

A different assessment was expressed last winter by the Senate minority leader, Harry Reid. "I'm not a big Greenspan fan," the Nevada Democrat allowed. "I think he's one of the biggest political hacks we have in Washington." His harsh comment was politely overlooked in governing circles, like an off-color joke told at a Washington dinner party.

When the adulation fades and people begin to understand the full weight of Greenspan's legacy, however, they should be able to see that Reid had it right. Indeed, the Senator's critique did not go far enough. The central banker is a hack, yes, but also a man of conviction.

Alan Greenspan is the most ideological Fed chairman since the 1930s. Without ever acknowledging his intentions, he enlisted himself and the awesome governing powers of the central bank in advancing the "reform" agenda of the Republican right. The chairman thus became an important actor in achieving the profound transformations that occurred during the last generation: the retreat of government, the rise of market ideology and the financialization of American economic life. The "money guys" gained hegemony over the "real economy" of production and work--the people and businesses who make things. The consequences imposed on society are often described as "the tyranny of the bottom line." In numerous ways, the Greenspan Fed helped make it happen. However, the chairman did not produce what conservative doctrine promises--stable and secure prosperity.

Greenspan crossed a line previous Fed chairmen had always gingerly honored: the appearance of political neutrality. That's what angered Reid--this chairman made himself a player on highly partisan matters, using his status as the influential arbiter of "sound economics" to prod Congress and the public to accept the right's larger goals. After years of hectoring Democrats to cut spending and eliminate federal budget deficits, the chairman turned around and endorsed George W. Bush's massive, regressive tax cuts. Democrats fumed, since they had been snookered by Bill Clinton and his Treasury Secretary Robert Rubin into accepting the Fed's agenda, with never a complaining word. But Wall Street loved the wizard, who had gratuitously embraced the GOP plan to deform Social Security by turning over its trillions to the private investment houses.

Trespassing in party politics is not a trivial offense. The so-called "independent" Federal Reserve, from its origins in 1913, has in theory been a cloistered, technocratic institution that has stayed above the fray, making "scientific" decisions on money and credit, acting like a "governor" that regulates the engine of economic growth for long-term stability. The notion of a depoliticized central bank is illusory, of course, since banking interests have always hovered intimate-ly around the Fed's policy decisions. But the myth is useful cover and necessary to sustain the Fed's privileged status as a government agency exempted from normal scrutiny and criticism, deliberately shielded from accountability to the voters--that is, shielded from democracy.

But if the Fed chairman is acting as an errand boy for special interests--in this case for concentrated financial power and wealth--why should the central bank continue to be granted its protected status? Why not bring the institution out into full sunlight, scrub away the pseudo-scientific mystique, make it accountable to elected officials and let Americans learn how to engage with the political-economic issues that govern their lives?

Like other good questions prompted by Greenspan's distinctive performance, this debate is unlikely to be heard, not yet anyway. The bipartisan deference to the central bank remains too strong. Reform-minded politicians have dwindled to a handful. Someday, however, the partisan question might come back to haunt the Federal Reserve and the right-wing Republicans, too.

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