Alan Greenspan
American economist
Alan Greenspan
Alan Greenspan is an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private adviser and provides consulting for firms through his company, Greenspan Associates LLC. First appointed Federal Reserve chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006 after the second-longest tenure in the position.
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Alan Greenspan: The rest of the country doesn't like New York
CNN - 21 days
Read full story for latest details.
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CNN article
Four Reasons Trump Will Quit
Huffington Post - about 1 month
As startling and unprecedented as it may be, there's a good chance Donald Trump won't finish out even one term as president. Yes, Richard Nixon resigned from office, so technically, there is a "precedent," but Nixon's case was different. Nixon resigned in disgrace to avoid being impeached--to avoid being exposed as the Machiavellian felon and borderline neurotic he was. Trump won't face impeachment. He'll just quit. Here are four reasons why: 1. The job will simply be too much of a grind. Even priding himself on being an accomplished delegator, the amount of work required of a sitting president--much of it tedious and enervating--will overwhelm him. He can delegate all he likes, but he's still going to be president when he wakes up in the morning, and the demands of that job are going to put the zap on his head. They will crush him. Moreover, the fact that Trump himself has said he was "surprised" to have won (not nearly as surprised as the rest of us, Donald) indic ...
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Huffington Post article
Alan Greenspan calls Dodd-Frank a 'disastrous mistake'
CNN - 4 months
Donald Trump could have an ally in Alan Greenspan, the former Federal Reserve Chair, when it comes to financial regulations.
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CNN article
Nonfiction: Was Alan Greenspan Motivated by Politics More Than Economics?
NYTimes - 4 months
Sebastian Mallaby’s “The Man Who Knew” is a biography of Alan Greenspan, the chairman of the Federal Reserve from 1987 to 2006.
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NYTimes article
Novo livro revela as contradições de Alan Greenspan
Wall Street Journal - 4 months
Longe de ser um sábio onisciente, Alan Greenspan era assolado por dúvidas quanto ao rumo que o Fed deveria seguir. Ele se perguntava em voz alta se a calma na economia e a celebração de sua própria reputação não poderiam acabar provocando problemas.
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Wall Street Journal article
La culpa no fue de Alan Greenspan
Wall Street Journal - 5 months
Lejos de creer que los mercados se estaban autocorrigiendo, el ex presidente de la Reserva Federal de Estados Unidos agonizaba sobre su inestabilidad mucho antes de la crisis financiera de 2008. Ensayo de Sebastian Mallaby.
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Wall Street Journal article
Greenspan's Bond Warning Goes Unheeded
Wall Street Journal - 5 months
Former Federal Reserve Chairman Alan Greenspan warned in a Bloomberg interview on Thursday that yields on the benchmark U.S. Treasury note could rise to 5%. The yield promptly sank to a two-week low.
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Wall Street Journal article
The Sad Legacy of Compromise Democrats
Huffington Post - about 1 year
By Mark Blessington The most common way to follow the money in today's economy and track winners and losers is with the Gini Index. It measures the degree of income disparity, where higher numbers represent wider gaps from rich to poor. As shown in the chart below, Gini has been on a steady rise since 1967. This rise has largely persisted through Republican and Democratic administrations. To bring the picture into sharp relief, I take a different tact. Now I calculate change in Gini for each administration, and sort them with the best administration on the far left (Johnson) and the worst administration on the far right (Reagan). Income disparity increased most during the Reagan administration. Clearly, Reaganomics and its embrace of trickle-down economics did the most to push wealthy interests forward at the expense of everyone else. From an income equality perspective, Reagan was the worst thing to happen in nearly 50 years of politics. This phenomenon is already w ...
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Huffington Post article
Hillary Blames Bernie for an Old Clintonite Hustle, and That's a Rotten Shame
Huffington Post - about 1 year
The Clintons have no shame, that much you can count on. That stupefying arrogance was on full display in the most recent presidential campaign debate when Hillary Clinton countered Bernie Sanders' charge that she was compromised by her close ties to Goldman Sachs and other rapacious Wall Street interests with the retort: Sen. Sanders, you're the only one on this stage that voted to deregulate the financial markets in 2000, ... to make the SEC and the Commodity Futures Trading Commission no longer able to regulate swaps and derivatives, which were one of the main causes of the collapse in '08. Hillary knows that the disastrous legislation, the Commodity Futures Modernization Act (CFMA), had nothing to do with Sanders and everything to do with then-President Bill Clinton, who devoted his presidency to sucking up to Wall Street. Clinton signed this bill into law as a lame-duck president, ensuring his wife would have massive Wall Street contributions for her Senate run. Sanders ...
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Huffington Post article
Market Faith in Anxious Times
Huffington Post - about 1 year
As markets tumble again in China, with ripple effects across the globe, concerns about the role of fear and anxiety in market behavior have reemerged. Is the sharp decline based on "real" changes in value or the result of speculation and a herd mentality? Are emotions and anxieties the actual source of the problem? Calls for calm are being issued. After the previous crash last August, Chinese authorities even cracked down on the spread of rumors about market activity! Analysts around the world hasten to explain the economic forces at work, with many calling for renewed trust in the market. It's important to understand what's behind this language of calls for market confidence, because it bears on how we respond to crises like this one. Almost 20 years ago, Alan Greenspan famously spoke of the "irrational exuberance" of market actors contributing to a stock bubble. He pitted calm and "reasonable" trust in market mechanisms against the emotional "irrationality" of certain regions a ...
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Huffington Post article
The Big Short </em>- a chronicle of infectious shortsightedness; epidemic blindness, delusion, and deceit.
Huffington Post - about 1 year
"Crap." That word is used quite often by the handful (one handful) of analysts and traders who "shorted" (bet against) the trillion-dollar mortgage-backed securities market that was generating billions in revenues for the world's biggest banks, from 2004 to 2007. "Morons." That word is used quite often by the same handful to describe those who had bundled, packaged and re-packaged never-ever-should-have-been-made mortgages (that never-ever-could-be-repaid) into bonds that somehow got rated and sold as riskless; and then re-packaged the crappiest of the "crap" (that couldn't be sold) into still riskier bonds that, absurdly, were blessed as risk-free. The wonder is that so many supposedly smart and very very highly compensated Wall Street types (no necessary correlation) and their supposedly sophisticated and wealthy investors (no necessary correlation) didn't bother to try to understand the folly of what they were doing. Or didn't care or want to understand. Michael Lewis: ...
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Huffington Post article
What still scares the Federal Reserve
CNN - about 1 year
Alan Greenspan calls the job of being America's top central banker "torture."
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CNN article
The Federal Reserve Should Let Jobs and Wages Grow
Huffington Post - about 1 year
The Federal Reserve is widely expected to raise the federal funds interest rate from the near-zero levels in force since December 2008. With the headline unemployment rate at five percent, many Fed officials are declaring that we are near full employment, and will therefore act to slow the economy for the first time in seven years. This would be a mistake. Our jobs recovery remains incomplete. In 1977, Congress tasked the Federal Reserve with the "dual mandate" of pursuing "maximum" employment and low inflation. But fighting potential inflation -- the top priority of inflation hawks at the Fed -- comes at the expense of jobs and wages. Raising interest rates dampens economic demand with the goal of impairing the job market and undermining workers' ability to seek higher pay or better benefits (what Wall Street executives refer to as "wage inflation"). If the Fed raises interest rates for the first time since the Great Recession, they will effectively be declaring "mission accomp ...
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Fed Rate Hike Could Hurt Employment
Huffington Post - about 1 year
Fed Chair Janet Yellen all but confirmed the Fed was ready to raise interest rates in December. She made her case for raising interest rates in a speech on Wednesday at the Economic Club in Washington. "Ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2 percent as the disinflationary effects of declines in energy and import prices wane," she said. This is while the latest labor productivity stats show productivity is improving, and wages are finally rising above the inflation rate, which is a necessary condition for continued growth. But a rate hike at this time could make it more difficult for consumers to spend their new found wealth. They might decide to save more instead, at a time when businesses are also saving more and investing less in increased productivity. The Fed's favored inflation index isn't back to their 2 percent target. N ...
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Huffington Post article
The Lessons of Repealing Glass Steagall
Huffington Post - over 1 year
Protecting the American people from another devastating financial crash and the economic wreckage it causes begins with reflecting honestly about the past and trying to learn the right lessons. In the late 1990s, virtually all the leaders in the financial industry as well as policymakers and elected officials in Washington worked together to deregulate finance, including in particular the repeal the Glass-Steagall Act on November 12, 1999, 16 years ago. That law was put in place after the Great Depression and protected taxpayers for more than 60 years by separating traditional, commercial banking from higher-risk investment and trading firms. While the 2008 financial crisis almost certainly would have occurred if Glass-Steagall had remained in place, its repeal greatly aided the spread of the disaster throughout the financial system and broader economy. Unfortunately, there's been too little willingness by those on Wall Street and in Washington to admit this mistake (and others) ...
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Huffington Post article
Introducing a Rational Way to Avoid Financial Disasters
Huffington Post - over 1 year
In 1996, Alan Greenspan used a two-word phrase in a speech, and stock markets around the world began to drop. The two-word phrase was "irrational exuberance." Greenspan was famous for purposely making his words hard to understand, but in this case, the message was clear. Stocks around the world appeared to be overvalued, especially in the United States. In fact, it was the start of the Dot-Com bubble. Millions of amateur and professional investors alike piled into the NASDAQ hoping to make a fortune on brand new Internet companies--many of which had never earned a dime. But then the bubble burst, and people lost a fortune instead. The same thing happened again with the housing bubble in the 2000's, which temporarily dropped the DOW by 54%. When it comes to investing, irrational exuberance is a fact of life. It will always be a part of investing, but you don't have to be a part of it. Take Off the Rose-Colored Glasses On my first real estate deal, I made a 100% return ...
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Huffington Post article
Learn about memorable moments in the evolution of Alan Greenspan
  • 2012
    On April 19, 2012, Greenspan received the Eugene J. Keogh Award for Distinguished Public Service from NYU.
    More Details Hide Details Statements, speeches and interviews Articles Criticism
  • 2011
    In an October 2011 lecture addressing the Occupy movement, Noam Chomsky characterized portions of Greenspan's February 1997 testimony to the U.S. Senate as an example of the self-serving attitudes of the so-called 1%.
    More Details Hide Details In that testimony, Greenspan had stated that growing worker insecurity is a significant factor keeping inflation and inflation expectation low, thereby promoting long-term investment.
  • 2008
    In Congressional testimony on October 23, 2008, Greenspan acknowledged that he was "partially" wrong in opposing regulation and stated "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity—myself especially—are in a state of shocked disbelief."
    More Details Hide Details Referring to his free-market ideology, Greenspan said: "I have found a flaw. I don't know how significant or permanent it is. But I have been very distressed by that fact." When Representative Henry Waxman (D-CA) pressed him to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said. "Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well." Greenspan admitted fault in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected. Matt Taibbi described the Greenspan put and its bad consequences saying: "every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over", thereby making it "almost impossible" for the banks to lose money. He also called Greenspan a "classic con man" who, through political savvy, "flattered and bullshitted his way up the Matterhorn of American power and jacked himself off to the attention of Wall Street for 20 consecutive years".
    However, an October 15, 2008, article in the Washington Post analyzing the origins of the economic crisis claims that Greenspan vehemently opposed any regulation of derivatives, and actively sought to undermine the office of the Commodity Futures Trading Commission when the Commission sought to initiate regulation of derivatives.
    More Details Hide Details Meanwhile, Greenspan recommended improving mark-to-market regulations to avoid having derivatives or other complex assets marked to a distressed or illiquid market during times of material adverse conditions seen during the late 2000s credit crisis. Greenspan was not alone in his opposition to derivatives regulation. In a 1999 government report that was a key driver in the passage of the Commodity Futures Modernization Act of 2000—legislation that clarified that most over-the-counter derivatives were outside the regulatory authority of any government agency—Greenspan was joined by Treasury Secretary Lawrence Summers, Securities and Exchange Commission Chairman Arthur Levitt, and Commodity Futures Trading Commission Chairman William Ranier in concluding that "under many circumstances, the trading of financial derivatives by eligible swap participants should be excluded from the CEA" (Commodity Exchange Act). Other government agencies also supported that view.
    In March 2008, Greenspan wrote an article for the Financial Times Economists' Forum in which he said that the 2008-financial crisis in the United States is likely to be judged as the most wrenching since the end of World War II.
    More Details Hide Details In it he argued: "We will never be able to anticipate all discontinuities in financial markets." He concluded: "It is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition." The article attracted a number of critical responses from forum contributors, who, finding causation between Greenspan's policies and the discontinuities in financial markets that followed, criticized Greenspan mainly for what many believed to be his unbalanced and immovable ideological suppositions about global capitalism and free competitive markets. Notable critics included J. Bradford DeLong, Paul Krugman, Alice Rivlin, Michael Hudson, and Willem Buiter. Greenspan responded to his critics in a follow-up article in which he defended his ideology as applied to his conceptual and policy framework, which, among other things, prohibited him from exerting real pressure against the burgeoning housing bubble or, in his words, "leaning against the wind". Greenspan argued, "My view of the range of dispersion of outcomes has been shaken, but not my judgment that free competitive markets are by far the unrivaled way to organize economies". He concluded: "We have tried regulation ranging from heavy to central planning. None meaningfully worked. Do we wish to retest the evidence?" Financial Times associate editor and chief economics commentator Martin Wolf defended Greenspan primarily as a scapegoat for the market turmoil.
    In congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation.
    More Details Hide Details The New York Times wrote, "a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken". Although many Republican lawmakers tried to blame the housing bubble on Fannie Mae and Freddie Mac, Greenspan placed far more blame on Wall Street for bundling subprime mortgages into securities.
    In September 2008 Joseph Stiglitz stated that Greenspan "didn't really believe in regulation; when the excesses of the financial system were noted, (he and others) called for self-regulation—an oxymoron".
    More Details Hide Details Greenspan, according to the New York Times, says he himself is blameless. On April 6, 2005, Greenspan called for a substantial increase in the regulation of Fannie Mae and Freddie Mac: "Appearing before the Senate Banking Committee, the Fed chairman, Alan Greenspan, said the enormous portfolios of the companies—nearly a quarter of the home-mortgage market—posed significant risks to the nation's financial system should either company face significant problems." Despite this, Greenspan still claims to be a firm believer in free markets, although in his 2007 biography he wrote, "History has not dealt kindly with the aftermath of protracted periods of low risk premiums" as seen before the credit crisis of 2008. In 2009 Robert Reich wrote that "Greenspan's worst move was to contribute to the giant housing bubble and the worst worldwide crash since the Great Depression. In 2004 he lowered interest rates to 1%, enabling banks to borrow money for free, adjusted for inflation. Naturally, the banks wanted to borrow as much as they possibly could, then lend it out, earning nice profits. The situation screamed for government oversight of lending institutions, lest the banks lend to unfit borrowers. He refused, trusting the market to weed out bad credit risks. It did not."
    In 2008, Greenspan expressed great frustration that the February 23 speech was used to criticize him on ARMs and the subprime mortgage crisis, and stated that he had made countervailing comments eight days after it that praised traditional fixed-rate mortgages.
    More Details Hide Details In that speech, Greenspan had suggested that lenders should offer to home purchasers a greater variety of "mortgage product alternatives" other than traditional fixed-rate mortgages. Greenspan also praised the rise of the subprime mortgage industry and its tools for assessing credit-worthiness: The subprime mortgage industry collapsed in March 2007, with many of the largest lenders filing for bankruptcy protection in the face of spiraling foreclosure rates. For these reasons, Greenspan has been criticized for his role in the rise of the housing bubble and the subsequent problems in the mortgage industry, as well as "engineering" the housing bubble itself. In 2004 Businessweek magazine analysts argued: "It was the Federal Reserve-engineered decline in rates that inflated the housing bubble the most troublesome aspect of the price runup is that many recent buyers are squeezing into houses that they can barely afford by taking advantage of the lower rates available from adjustable-rate mortgages. That leaves them fully exposed to rising rates.
  • 2007
    In the documentary film Inside Job Greenspan is cited as one of the persons responsible for the financial crisis of 2007–08.
    More Details Hide Details He is also named in Time Magazine as one of the "25 People to Blame for the Financial Crisis". Greenspan describes himself as a "lifelong libertarian Republican".
    A triggering factor in the 2007 subprime mortgage financial crisis is believed to be the many subprime ARMs that reset at much higher interest rates than what the borrower paid during the first few years of the mortgage.
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    In the wake of the subprime mortgage and credit crisis in 2007, Greenspan stated that there was a bubble in the U.S. housing market, warning in 2007 of "large double digit declines" in home values "larger than most people expect".
    More Details Hide Details Greenspan also noted, however, "I really didn't get it until very late in 2005 and 2006." Greenspan stated that the housing bubble was "fundamentally engendered by the decline in real long-term interest rates", though he also claims that long-term interest rates are beyond the control of central banks because "the market value of global long-term securities is approaching $100 trillion" and thus these and other asset markets are large enough that they "now swamp the resources of central banks".
    Greenspan wrote a memoir titled The Age of Turbulence: Adventures in a New World, published September 17, 2007.
    More Details Hide Details 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. 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".
    In August 2007, Deutsche Bank announced that it would be retaining Greenspan as a senior advisor to its investment banking team and clients.
    More Details Hide Details In mid-January 2008, hedge fund Paulson & Co. hired Greenspan as an adviser. According to the terms of their agreement he was not to advise any other hedge fund while working for Paulson. (In 2007 Paulson had foreseen the collapse of the sub-prime housing market and hired Goldman Sachs to package their sub-prime holdings into derivatives and sell them. Some economic commentators blamed this collapse on Greenspan's policies while at the Fed.) On April 30, 2009, Greenspan offered a defense of the H-1B visa program, telling a U.S. Senate subcommittee that the visa quota is "far too small to meet the need" and saying that it protects U.S. workers from global competition, creating a "privileged elite". Testifying on immigration reform before the Subcommittee on Immigration, Border Security and Citizenship, he said more skilled immigration was needed "as the economy copes with the forthcoming retirement wave of skilled baby boomers".
    In May 2007, Greenspan was hired as a special consultant by Pacific Investment Management Company (PIMCO) to participate in their quarterly economic forums and speak privately with the bond managers about Fed interest rate policy.
    More Details Hide Details
    On February 26, 2007, Greenspan forecast a possible recession in the United States before or in early 2008.
    More Details Hide Details Stabilizing corporate profits are said to have influenced his comments. The following day, the Dow Jones Industrial Average decreased by 416 points, losing 3.3% of its value.
  • 2006
    Greenspan's term as a member of the Board ended on January 31, 2006, and Ben Bernanke was confirmed as his successor.
    More Details Hide Details As chairman of the board, Greenspan did not give any broadcast interviews from 1987 through 2005. Immediately after leaving the Fed, Greenspan formed an economic consulting firm, Greenspan Associates LLC. He also accepted an honorary (unpaid) position at HM Treasury in the United Kingdom.
  • 2005
    In a May 2005 speech, Greenspan stated: "Two years ago at this conference I argued that the growing array of derivatives and the related application of more-sophisticated methods for measuring and managing risks had been key factors underlying the remarkable resilience of the banking system, which had recently shrugged off severe shocks to the economy and the financial system.
    More Details Hide Details At the same time, I indicated some concerns about the risks associated with derivatives, including the risks posed by concentration in certain derivatives markets, notably the over-the-counter (OTC) markets for U.S. dollar interest rate options." Greenspan opposed tariffs against People's Republic of China for its refusal to let the yuan rise, suggesting instead that any American workers displaced by Chinese trade could be compensated through unemployment insurance and retraining programs.
    In March 2005, in reaction to Greenspan's support of President Bush's plan to partially privatize Social Security, then-Democratic Senate Minority Leader Harry Reid attacked Greenspan as "one of the biggest political hacks we have in Washington" and criticized him for supporting Bush's 2001 tax cut plan.
    More Details Hide Details Then-Democratic House Minority Leader Nancy Pelosi added that there were serious questions about the Fed's independence as a result of Greenspan's public statements. Greenspan also received criticism from Democratic Congressman Barney Frank and others for supporting Bush's Social Security plans favoring private accounts. Greenspan had said Bush's model has "the seeds of developing full funding by its very nature. As I've said before, I've always supported moves to full funding in the context of a private account". Others, like Republican Senator Mitch McConnell, disagreed that Greenspan was too deferential to Bush, stating that Greenspan "has been an independent player at the Fed for a long time under both parties and made an enormous positive contribution". Economist Paul Krugman wrote that Greenspan was a "three-card maestro" with a "lack of sincerity" who, "by repeatedly shilling for whatever the Bush administration wants, has betrayed the trust placed in the Fed chairman".
  • 2004
    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.
    More Details Hide Details He was previously appointed to the post by Presidents Reagan, George H. W. Bush, and Clinton.
  • 2002
    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.
    More Details Hide Details 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. Greenspan advised senior members of the George W. Bush administration to depose Saddam Hussein for the sake of the oil markets. He believed that even a moderate disruption to the flow of oil could translate into high oil prices which could lead to "chaos" in the global economy and bring the industrial world "to its knees". He feared that Saddam could seize control of the Straits of Hormuz and restrict the transport of oil through them. In a 2007 interview, he said, "people do not realize in this country, for example, how tenuous our ties to international energy are. That is, we on a daily basis require continuous flow. If that flow is shut off, it causes catastrophic effects in the industrial world. And it’s that which made him Saddam far more important to get out than bin Laden."
  • 2001
    After the September 11, 2001 attacks, the Federal Open Market Committee voted to reduce the federal funds rate from 3.5% to 3.0%. Then, after the accounting scandals of 2002, the Fed dropped the federal funds rate from then current 1.25% to 1.00%.
    More Details Hide Details Greenspan stated that this drop in rates would have the effect of leading to a surge in home sales and refinancing, adding that "Besides sustaining the demand for new construction, mortgage markets have also been a powerful stabilizing force over the past two years of economic distress by facilitating the extraction of some of the equity that homeowners have built up over the years". According to some, however, Greenspan's policies of adjusting interest rates to historic lows contributed to a housing bubble in the United States. The Federal Reserve acknowledged the connection between lower interest rates, higher home values, and the increased liquidity the higher home values bring to the overall economy: "Like other asset prices, house prices are influenced by interest rates, and in some countries, the housing market is a key channel of monetary policy transmission". In a February 23, 2004 speech, Greenspan suggested that more homeowners should consider taking out adjustable-rate mortgages (ARMs) where the interest rate adjusts itself to the current interest in the market. The Fed own funds rate was at a then all-time-low of 1%. A few months after his recommendation, Greenspan began raising interest rates, in a series of rate hikes that would bring the funds rate to 5.25% about two years later.
    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.
    More Details Hide Details
    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.
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  • 2000
    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.
    More Details Hide Details
    In 2000, Greenspan raised interest rates several times; these actions were believed by many to have caused the bursting of the dot-com bubble.
    More Details Hide Details 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.
  • 1994
    Greenspan also played a key role in organizing the U.S. bailout of Mexico during the 1994-95 Mexican peso crisis.
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  • 1993
    Republican Senator Jim Bunning, who opposed Greenspan's fifth reconfirmation, charged that Greenspan should comment only on monetary policy, not fiscal policy. Greenspan had used his position as Fed Chairman to comment upon fiscal policy as early as 1993, however, when he supported President Clinton's deficit reduction plan, which included tax increases and budget cuts.
    More Details Hide Details
    Greenspan lent support to Clinton's 1993 deficit reduction program.
    More Details Hide Details 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).
  • 1987
    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.
    More Details Hide Details Democratic president Bill Clinton reappointed Greenspan, and consulted him on economic matters.
    First appointed Federal Reserve chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring on January 31, 2006, after the second-longest tenure in the position (behind William McChesney Martin).
    More Details Hide Details Greenspan came to the Federal Reserve Board from a consulting career. Although he was subdued in his public appearances, favorable media coverage raised his profile to a point that several observers likened him to a "rock star". Democratic leaders of Congress criticized him for politicizing his office because of his support for Social Security privatization and tax cuts, which they felt would increase the deficit. The easy-money policies of the Fed during Greenspan's tenure have been suggested by some to be a leading cause of the dotcom bubble and subprime mortgage crisis, which occurred within a year of his departure from the Fed, and have, said the Wall Street Journal, "tarnished his reputation." Yale economist Robert Shiller argues that "once stocks fell, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed". Greenspan was born in the Washington Heights area of New York City. His father, Herbert Greenspan, was of Romanian Jewish descent, and his mother, Rose Goldsmith, was of Hungarian Jewish descent. His father worked as a stockbroker and market analyst in New York City.
    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.
    More Details Hide Details Investor, author and commentator Jim Rogers has said that Greenspan lobbied to get this chairmanship.
  • 1984
    In 1984, Greenspan began dating journalist Andrea Mitchell. Greenspan at the time was 58; Mitchell is 20 years younger. In 1997, they were married by Supreme Court Justice Ruth Bader Ginsburg.
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    He also served as a member of the influential Washington-based financial advisory body, the Group of Thirty in 1984.
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  • 1982
    He was a director of the Council on Foreign Relations foreign policy organization between 1982 and 1988.
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  • 1976
    In 1976, Greenspan received the U.S. Senator John Heinz Award for Greatest Public Service by an Elected or Appointed Official, an award given out annually by Jefferson Awards.
    More Details Hide Details In 2004, Greenspan received the Dwight D. Eisenhower Medal for Leadership and Service, from Eisenhower Fellowships. In 2005, he became the first recipient of the Harry S. Truman Medal for Economic Policy, presented by the Harry S. Truman Library Institute. In 2007, Greenspan was the recipient of the inaugural Thomas Jefferson Foundation Medal in Citizen Leadership, presented by the University of Virginia. On December 14, 2005, he was awarded an honorary Doctor of Commercial Science degree by New York University, his fourth degree from that institution.
  • 1968
    In mid-1968, Greenspan agreed to serve Richard Nixon as his coordinator on domestic policy in the nomination campaign.
    More Details Hide Details Greenspan has also served as a corporate director for Aluminum Company of America (Alcoa); Automatic Data Processing; Capital Cities/ABC, Inc. General Foods; J.P. Morgan & Co. Morgan Guaranty Trust Company; Mobil Corporation; and the Pittston Company.
  • 1955
    From 1955 to 1987, when he was appointed chairman of the Federal Reserve, Greenspan was chairman and president of Townsend-Greenspan & Co., Inc., an economics consulting firm in New York City, a 32-year stint interrupted only from 1974 to 1977 by his service as Chairman of the Council of Economic Advisers under President Gerald Ford.
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  • 1952
    Greenspan has married twice. His first marriage was to a Canadian artist named Joan Mitchell in 1952; the marriage ended in annulment less than a year later.
    More Details Hide Details He dated newswoman Barbara Walters in the late 1970s.
  • 1948
    During his economics studies at New York University, Greenspan worked under Eugene Banks, a managing director at the Wall Street investment bank Brown Brothers Harriman, in the firm's equity research department. From 1948 to 1953, Greenspan worked as an analyst at The National Industrial Conference Board (currently known as The Conference Board), a business- and industry-oriented think tank in New York City.
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  • 1945
    In 1945, Greenspan attended New York University, where he earned a B.A. degree in economics summa cum laude in 1948 and an M.A. degree in economics in 1950.
    More Details Hide Details At Columbia University, he pursued advanced economic studies under Arthur Burns but dropped out. In 1977, Greenspan obtained a Ph.D. in economics from New York University. His dissertation is not available from the university since it was removed at Greenspan's request in 1987, when he became Chairman of the Federal Reserve Board. In April 2008, however, Barron's obtained a copy and notes that it includes "a discussion of soaring housing prices and their effect on consumer spending; it even anticipates a bursting housing bubble".
  • 1940
    Greenspan attended George Washington High School from 1940 until he graduated in June 1943, where one of his classmates was John Kemeny.
    More Details Hide Details He played clarinet and saxophone along with classmate Stan Getz. He further studied clarinet at the Juilliard School from 1943 to 1944. Among his bandmates in the Woody Herman band was Leonard Garment, Richard Nixon's Special Counsel.
  • 1926
    Born on March 6, 1926.
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