Bernanke-Greenspan, Bush-Obama & An 18th Century French Diplomat

“La parole nous a été donnée pour déguiser notre pensée.” –
Speech was given to us to conceal our thoughts. – Talleyrand

Nicknamed as the Prince of Diplomats, Charles Maurice de Talleyrand-Périgord is regarded as one of the most versatile and influential diplomats in European history. Talleyrand served as a minister to the House of Bourbons before the French Revolution, then to Napolean in his reign and then to the new Bourbons after the fall of Napolean.

This is an amazing accomplishment of survival and success. We are certain it is due to Talleyrand’s famous maxim quoted above. Talleyrand was very well compensated for his skills by the various governments and parties that sought his help. The picture below is of Chateau de Valencay which he bought in 1804. His Paris residence on the Place de la Concorde was sold to James Mayer de Rothschild in 1838 and is now owned by the American Embassy. 

(Talleyrand’s Chateau de Valencay) (Source wikipedia)

In contrast to respect for his skill, Talleyrand’s accomplishments have not been judged kindly by history. In fact, in retrospect, historians have concluded that his treaties and successes sowed the seeds of World War I.


In our opinion, the modern day version of Talleyrand was Alan Greenspan, the Fed Chairman, appointed by President Reagan in 1986. Dr. Greenspan proved to be a successful and respected Fed Chairmen under the successive administrations of President Bush (senior), President Clinton and then President George W. Bush. When he retired in 2006, Dr. Greenspan was a globally revered figure. 

During this long tenure, Greenspan had to speak at length and often. He understood the perils of being understood by the various constituencies, the Media, the Congress, the Executive Branch and Global Investors. So to protect himself, Greenspan developed GreenSpeak, a way of speaking that soothed everybody, impressed many but revealed nothing of his thoughts and plans. In other words, Greenspan became the ultimate master of the art of speaking to conceal his thoughts. Talleyrand would have been astounded and knelt before Greenspan, his master. 

After his retirement, Dr. Greenspan became a wealthy man by writing his memoirs, by consulting with large financial institutions and via lucrative speaking fees.

Unfortunately, like Talleyrand, Mr. Greenspan’s tenure has begun to be judged negatively. It is now widely acknowledged that Greenspan’s easy money policies might have sowed the seeds of the Credit Bubble and may have caused the Housing Bubble. 

The approach of the current Fed Chairman, Dr. Ben Bernanke is diametrically opposite of the Greenspan-Talleyrand maxim. Dr. Bernanke came to the Fed determined to make the Fed’s thoughts and actions transparent to investors and the public. He has succeeded in his mission. 

Dr. Bernanke’s accomplishments have been phenomenal. He has single-handedly prevented a depression in America and rescued the American (& global ) financial system from collapse. In our opinion, Dr. Bernanke has been a great Fed chairman and might end up being the greatest Fed chairman if reappointed to a second term.

Yet, Ben Bernanke remains unrespected and unapplauded. The reason in our view is simple. Bernanke succeeded in his mission to make his thoughts and his actions transparent. That seems to have doomed him. The sad reality is that what we understand, we do not respect. When we understand something, we can easily debate it. We can imagine scenarios under which it would not work, however unrealistic such scenarios might be.

In our opinion, President Obama owes the success of his first six months to Dr. Bernanke. Yet, President Obama has not praised Dr. Bernanke in public and he has abstained from expressing his trust in Ben Bernanke.

So we are afraid that while history will judge Dr. Bernanke as a great Fed Chairman, he will not be reappointed by President Obama. That will be America’s loss.


The tale of Talleyrand applies equally to President Bush and President Obama.

President Bush was probably the most direct and the most transparent President in recent times. You may have liked or disliked George W. Bush, but you knew exactly where he stood. Bush was the ultimate anti-Talleyrand because he apparently believed that speech was given to us to simplify our thoughts and to speak them without regard to their reception by the audience. Only George W. Bush could make a lovely idea seem terrible. Because people understood Bush and disliked him, they berated Bush for being dumb at best and idiotic at worst.

In contrast, President Obama is a brilliantly soothing speaker. He has the rare talent of making his actions seem very benign and positive. Look at what he has accomplished in such a short time.

President Obama has centralized power in his White House to an unprecedented extent. There is no policy that the Obama White House does not control completely. He has appointed several czars that report to his White House team thereby reducing his cabinet to being royal sycophants. He has even marginalized Secretary of State Hillary Clinton by his appointment of czars for every important region. Last week, President Obama recalled Dennis Ross from the State Department to the White House to advise him personally on Iran.

Tim Geithner, the Treasury Secretary, is no more than a aide to President Obama. It is the Obama White House that makes Economic-Treasury policy and Geithner is sent to justify it to the Congress and the media. The Obama White House decided on and implemented the GM-Chrysler policies. We cannot think of a single material thing that Obama has delegated to his cabinet.

President Obama is in the process of making massive changes to the American system, changes that America will live with for decades. Yet, this exercise has been done softly and with a wonderfully benign, hopeful public message. Like Dr. Greenspan, he has lulled America into soft, sweet complacent belief that everything is in good hands and will only get better. Had George W. Bush even attempted a fraction of the power grab of Obama, he would have been castigated as a dictator by every newspaper and every TV anchor in the world.

However, there are nascent signs that the rehabilitation of George W. Bush has begun. Old critics like Tom Friedman of the New York Times have begun looking at the Iraq war as a limited success. In his recent article “Winds of Change?”, Mr. Friedman quotes Michael Young, the opinion editor of The Beirut Daily Star as saying “Bush had a simple idea, that the Arabs could be democratic, and at that particular moment simple ideas were what was needed, even if he was disingenuous…..It was bolstered by the presence of a U.S. Army in the center of the Middle East. It created a sense that change was possible, that things did not always have to be as they were.”

Friedman then gives his own views of Bush’s Iraq policy “There are a million things to hate about President Bush’s costly and wrenching wars. But the fact is, in ousting Saddam in Iraq in 2003 and mobilizing the U.N. to push Syria out of Lebanon in 2005, he opened space for real democratic politics that had not existed in Iraq or Lebanon for decades.”

Our own views of the Iraq involvement are reflected in our July 2008 article Iraq & Tibet – Strategic Will of The American and Chinese People

Recent polls show some nascent signs that the Obama magic has begun to wear a little thinner. Soon, we think, President Obama will have to make some tough choices and articulate these to the American people, We sincerely hope that when he does so, he does it simply and directly. History has proven that the Talleyrand approach eventually fails and fails big.

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