Greenspan wrote a memoir titled The Age of Turbulence: Adventures in a New World, published September 17, 2007. Greenspan says that he wrote this book in longhand mostly while soaking in the bathtub, a habit he regularly employs ever since an accident in 1971, when he injured his back. Greenspan wrote:
To this day, the bathtub is where I get many of my best ideas. My assistants have gotten used to typing from drafts scrawled on damp yellow pads--a chore that got much easier once we found a kind of pen whose ink doesn't run. Immersed in my bath, I'm as happy as Archimedes as I contemplate the world.
Greenspan discusses in his book, among other things, his history in government and economics, capitalism and other economic systems, current issues in the global economy, and future issues that face the global economy. In the book Greenspan criticizes President George W. Bush, Vice President Dick Cheney, and the Republican-controlled Congress for abandoning the Republican Party's principles on spending and deficits. Greenspan's criticisms of President Bush include his refusal to veto spending bills, sending the country into increasingly deep deficits, and for "putting political imperatives ahead of sound economic policies". Greenspan writes, "They swapped principle for power. They ended up with neither. They deserved to lose [the 2006 election]". He praised Bill Clinton above all the other presidents for whom he'd worked for his "consistent, disciplined focus on long-term economic growth". Although he respected what he saw as Richard Nixon's immense intelligence, Greenspan found him to be "sadly paranoid, misanthropic and cynical". He said of Gerald Ford that he "was as close to normal as you get in a president, but he was never elected". Regarding future U.S. economic policy, Greenspan recommends improving the U.S. primary and secondary education systems. He asserts this would narrow the inequality between the minority of high-income earners and most workers whose wages have not grown in proportion with globalization and the nation's GDP growth.
On June 2, 1987, President Ronald Reagan nominated Greenspan as a successor to Paul Volcker as chairman of the Board of Governors of the Federal Reserve, and the Senate confirmed him on August 11, 1987. Investor, author and commentator Jim Rogers has said that Greenspan lobbied to get this chairmanship.
Two months after his confirmation Greenspan said immediately following the 1987 stock market crash that the Fed "affirmed today its readiness to serve as a source of liquidity to support the economic and financial system" George H. W. Bush blamed Fed policy for not winning a second term. Democratic president Bill Clinton reappointed Greenspan, and consulted him on economic matters. Greenspan lent support to Clinton's 1993 deficit reduction program. Greenspan, while still fundamentally monetarist in orientation, had eclectic views on the economy, and his monetary policy decisions largely followed standard Taylor rule prescriptions (see Taylor 1993 and 1999).
In 2000, Greenspan raised interest rates several times; these actions were believed by many to have caused the bursting of the dot-com bubble. According to Nobel laureate Paul Krugman, however, "he didn't raise interest rates to curb the market's enthusiasm; he didn't even seek to impose margin requirements on stock market investors. Instead, he waited until the bubble burst, as it did in 2000, then tried to clean up the mess afterward". E. Ray Canterbery agrees with Krugman's criticism.
In January 2001, Greenspan, in support of President Bush's proposed tax decrease, stated that the federal surplus could accommodate a significant tax cut while paying down the national debt.
In autumn 2001, as a decisive reaction to the September 11 attacks and various corporate scandals which undermined the economy, the Greenspan-led Federal Reserve initiated a series of interest cuts that brought down the Federal Funds rate to 1% in 2004. While presenting the Federal Reserve's Monetary Policy Report in July 2002, he said that "It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously". and suggested that financial markets need to be regulated. His critics, led by Steve Forbes, attributed the rapid rise in commodity prices and gold to Greenspan's loose monetary policy, which Forbes believed had caused excessive asset inflation and a weak dollar. By late 2004, the price of gold was higher than its 12-year moving average.
On May 18, 2004, Greenspan was nominated by President George W. Bush to serve for an unprecedented fifth term as chairman of the Federal Reserve. He was previously appointed to the post by Presidents Reagan, George H. W. Bush, and Clinton.