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Former US Central Banker Criticizes Republican Economic Policies

The longtime head of the U.S. central bank, Alan Greenspan, has criticized the economic policies of President Bush and the Republican-majority Congress.

In a new book The Age of Turbulence: Adventures in a New World on sale Monday that covers his life and 18-year tenure as chairman of the Federal Reserve, Greenspan criticizes Mr. Bush for failing to veto large spending increases by the Republican-led Congress that swelled the government deficit.

Greenspan says the Republican party abandoned its values of fiscal discipline and smaller government spending. He accuses the party of swapping principles for political power.

The 81-year-old economist also has clarified a passage in his book, in which he writes "the Iraq war is largely about oil."

Mr. Greenspan in an interview with the Washington Post says he was not implying that securing global oil supplies was the Bush administration's motive for the war, but the removal of Saddam Hussein makes supplies safer.

Alan Greenspan was appointed chairman of the Federal Reserve Board by President Reagan in 1987, and served in the post until stepping down in 2006.

The Federal Reserve Board sets benchmark interest rates that govern how much banks can charge each other for overnight loans. Most other rates of credit are based on this figure. The Board's chairman is one of the most influential commentators on U.S. and global economic policies.

In recent interviews about his book, the former central banker has defended himself from critics who charge interest rate cuts after 2001 encouraged lenders to make risky home mortgage loans that artificially inflated the U.S. housing market and led to its current troubles.

Greenspan acknowledges the low interest rates encouraged the housing bubble, but he said the rate cuts were needed after the 2001 terrorist attacks to fend off a recession. He says the U.S. housing boom is part of a worldwide increase in real estate values caused by fundamental changes in the global economy.

Greenspan has also discussed more personal stories in recent interviews, including his first date in 1984 with Andrea Mitchell - a well-known television reporter and now his wife.

Greenspan says he convinced her to return to his apartment by saying he wanted to show her an essay he had written on the Sherman Antitrust Act of 1890.