cover image Greenspan's Taming of the Wave: Or a Golden Age Revisited

Greenspan's Taming of the Wave: Or a Golden Age Revisited

Francois-Xavier Chevallier. Palgrave MacMillan, $49.95 (205pp) ISBN 978-0-312-23859-9

In 1990, with the Dow Industrial Average under 3,000, French portfolio manager Chevallier gave a famous interview in Paris Match in which he predicted ""we are on the eve of a world stock market crash of world proportions, much worse than the previous one."" Instead, the U.S. stock market enjoyed its best decade ever, with the Dow Industrials rising almost uninterruptedly to near 12,000. Unabashed, Chevallier argues that the world did indeed go through a Great Depression in the 1990s, but U.S. Federal Reserve Chairman Alan Greenspan's economic management disguised the pain for Americans. Those who can accept this may also believe the author's current prediction that we are on the eve of a 30-year period of great prosperity that will rival the golden ages of 1789-1814, 1847-1866, 1896-1920 and 1940-1980. The economic theory underlying these claims is that of the Russian economist Nikolai Kondratiev, who, in the 1920s and '30s, traced 40-to-60-year cycles in wholesale prices, interest rates, wages and production back to 1790. Chevallier updates Kondratiev's work and refines it by postulating three out-of-phase cycles of growth, rising prices and debt. The original French title of this work, Le Bonheur conomique (Economical Happiness), is more descriptive of the contents, and positions it as an answer to Viviane Forrester's popular 1996 book, L'Horreur conomique (Economical Horror). (Jan. 29) Forecast: Breezy and dramatic (as demonstrated by the potent cover photo of a tsunami inundating Wall Street), this book also conveys an optimistic message that may get some media play and compel sophisticated stock market watchers to seek it out.