One is tempted to compare Mr Greenspan with Rudolf von Havenstein, the man in charge of the German Reichsbank during the 1923 hyperinflation. At the height of the crisis he promised to relieve the shortage of currency through the Reichsbank's new high-speed printing presses. But Mr Greenspan's failings, although extending to monetary policy, were mainly in financial sector regulation, where his instinct was to rescue delinquent institutions without disciplining them. For the same reason an analogy with Arthur Burns does not work. Burns was Richard Nixon's Fed chairman. In the aftermath of the 1971 dollar devaluation he pursued untrammelled monetary expansion to boost Nixon's re- election prospects, thereby helping to kindle the global inflation of the 1970s.
The parallel is much closer between Mr Brown and Burns' British partner in crime, the chancellor of the exchequer Anthony Barber, who was author of the Heath-Barber boom of 1970-73. This, like Mr Brown's fiscal expansionism, was supposed to put an end to “stop-go” in the British economy. It too ended in monetary collapse, namely the secondary banking crisis, which came close to necessitating the public rescue of NatWest (accomplished 35 years later, courtesy of the Royal Bank of Scotland).
No less illuminating, however, than these similarities between Mr Brown and Barber are the differences. The Brown boom threatens to prove far more damaging than its predecessor, because it lasted so much longer – more like 10 years than two-and-a-half – thanks to international payments patterns and elastic credit markets. This meant a correspondingly prolonged overvaluation of sterling and of UK assets. British export capacity, especially in manufacturing, was severely eroded. In the face of poor productivity performance expansion relied on immigrant inflows and external borrowing. British consumers became habituated to unsustainable spending, based on misleading indicators of household wealth as well as lax credit conditions.