Alan Greenspan (born March 6, 1926 in New York City) is an American economist and from 1987 to 2006 chairman of the Board of Governors of the Federal Reserve of the United States. He currently works as a private advisor, making speeches and providing consulting for firms through his company, Greenspan Associates LLC.
First appointed Fed chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring after a record-setting tenure on January 31, 2006, at which time he relinquished the chairmanship to Ben Bernanke. Greenspan was lauded for his handling of the Black Monday stock market crash that occurred very shortly after he first became chairman, as well as for his stewardship of the Internet-driven, "dot-com" economic boom of the 1990s. This expansion culminated in a stock market bubble burst in March 2000 followed by a recession beginning in late 2000 and continuing through 2002.
From 2001 until his retirement from the Fed, he was increasingly criticized for some statements seen as overstepping the Fed's traditional purview of monetary policy, and viewed by others as overly supportive of the policies of President George W. Bush, as well as for policies seen as leading to a housing bubble. During his tenure Greenspan was considered to be the leading authority on American domestic economic and monetary policy, and his active influence continues to this day.
First appointed Fed chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring after a record-setting tenure on January 31, 2006, at which time he relinquished the chairmanship to Ben Bernanke. Greenspan was lauded for his handling of the Black Monday stock market crash that occurred very shortly after he first became chairman, as well as for his stewardship of the Internet-driven, "dot-com" economic boom of the 1990s. This expansion culminated in a stock market bubble burst in March 2000 followed by a recession beginning in late 2000 and continuing through 2002.
From 2001 until his retirement from the Fed, he was increasingly criticized for some statements seen as overstepping the Fed's traditional purview of monetary policy, and viewed by others as overly supportive of the policies of President George W. Bush, as well as for policies seen as leading to a housing bubble. During his tenure Greenspan was considered to be the leading authority on American domestic economic and monetary policy, and his active influence continues to this day.
Greenspan was born in 1926 to a Hungarian Jewish family[2] in the Washington Heights area of New York City. He studied clarinet at The Juilliard School from 1943 to 1944.[3] He is an accomplished saxophone player who has played with Stan Getz.[4] While in college, he played in a jazz band. He then attended New York University (NYU), and received a B.S. in Economics (summa cum laude) in 1948, and an M.A in Economics in 1950. Greenspan went on to Columbia University, intending to pursue advanced economic studies, but subsequently dropped out. Much later, in 1977, NYU also awarded him a Ph.D. in Economics. He did not complete a dissertation,[citation needed] normally required for that degree. On December 14, 2005, he was awarded an honorary Doctor of Commercial Science from NYU, his fourth degree from that institution.
In the early 1950s, Greenspan began an association with famed novelist and philosopher Ayn Rand that would last until her death in 1982.[5] He wrote for Rand’s newsletters and authored several essays in her book Capitalism: The Unknown Ideal.[6] Rand stood beside him at his 1974 swearing-in as Chair of the Council of Economic Advisers.[5]
From 1948 to 1953, Greenspan worked as an economic analyst at The Conference Board, a business and industry oriented think-tank in New York City. From 1955 to 1987, when he was appointed as Chair of the Federal Reserve, Greenspan was Chairman and President of Townsend-Greenspan & Co., Inc., an economic consulting firm in New York City, a 33-year stint interrupted only from 1974 to 1977 by his service as Chairman of the Council of Economic Advisers under President Gerald Ford. In the summer of 1968, Greenspan agreed to serve Richard Nixon as his coordinator on domestic policy in the nomination campaign.[7] Greenspan also has served as a corporate director for Aluminum Company of America (Alcoa); Automatic Data Processing, Inc.; Capital Cities/ABC, Inc.; General Foods, Inc.; J.P. Morgan & Co., Inc.; Morgan Guaranty Trust Company of New York; Mobil Corporation; and The Pittston Company.
Alan Greenspan has been married twice. His first marriage was to Joan Mitchell in 1952; the marriage ended in divorce one year later in 1953. He dated newswoman Barbara Walters in the late 1970s.[5] In 1984, Greenspan began dating journalist Andrea Mitchell. Greenspan at the time was 58, and the also once divorced Mitchell was 20 years his junior at the age of 38. In 1997, they were married by Supreme Court Justice Ruth Bader Ginsburg.
In the early 1950s, Greenspan began an association with famed novelist and philosopher Ayn Rand that would last until her death in 1982.[5] He wrote for Rand’s newsletters and authored several essays in her book Capitalism: The Unknown Ideal.[6] Rand stood beside him at his 1974 swearing-in as Chair of the Council of Economic Advisers.[5]
From 1948 to 1953, Greenspan worked as an economic analyst at The Conference Board, a business and industry oriented think-tank in New York City. From 1955 to 1987, when he was appointed as Chair of the Federal Reserve, Greenspan was Chairman and President of Townsend-Greenspan & Co., Inc., an economic consulting firm in New York City, a 33-year stint interrupted only from 1974 to 1977 by his service as Chairman of the Council of Economic Advisers under President Gerald Ford. In the summer of 1968, Greenspan agreed to serve Richard Nixon as his coordinator on domestic policy in the nomination campaign.[7] Greenspan also has served as a corporate director for Aluminum Company of America (Alcoa); Automatic Data Processing, Inc.; Capital Cities/ABC, Inc.; General Foods, Inc.; J.P. Morgan & Co., Inc.; Morgan Guaranty Trust Company of New York; Mobil Corporation; and The Pittston Company.
Alan Greenspan has been married twice. His first marriage was to Joan Mitchell in 1952; the marriage ended in divorce one year later in 1953. He dated newswoman Barbara Walters in the late 1970s.[5] In 1984, Greenspan began dating journalist Andrea Mitchell. Greenspan at the time was 58, and the also once divorced Mitchell was 20 years his junior at the age of 38. In 1997, they were married by Supreme Court Justice Ruth Bader Ginsburg.
On June 2, 1987 President Reagan nominated Dr. 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. After the nomination, bond markets experienced their biggest one-day drop in 5 years. Just two months after his confirmation he was faced with his first crisis—the 1987 stock market crash. His terse statement, "the Fed stands ready to provide all necessary liquidity"[citation needed] is seen as having been effective in controlling the damage from that crash. (Others believe that his statement "...that the dollar would be devalued..." just days before was a primary factor in the crash.) Another famous example of the effect of his closely parsed comments was his December 5, 1996 remark about "irrational exuberance and unduly escalating stock prices" that led Japanese stocks to fall 3.2%.
Greenspan was famous for his ability to give technical and confusing speeches. U.S. News & World Report reported that, "Few can confuse Wall Street as thoroughly as Federal Reserve Board Chairman Alan Greenspan can."[17] Greenspan was sometimes so hard to understand that the Motley Fool radio show included a game called "What Did the Fed Chief Say?", where contestants were challenged to interpret snippets of Greenspan's speeches.[18] Greenspan mocked his own speaking style in 1988 when he said, "I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I said." To a central banker, being unclear is often an advantage since it grants more flexibility: if he is too predictable, markets are more willing to speculate in his future actions, and any move he makes will already be potentially priced into the economy. During his period at the Fed, Greenspan never publicly commented what algorithms or inflation and unemployment targets the Fed used in setting the interest rate. Despite this, over the years he built credibility in the financial markets that he was willing to fight inflation. The flexibility permitted him to affect the economy by, say, lowering interest rates in order to fight a recession while his credibility made it possible to do this without shocking the bond market.
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. He was previously appointed to the post by Presidents Ronald Reagan, George H. W. Bush and Bill Clinton. Greenspan was awarded the Presidential Medal of Freedom, the highest civilian award in the United States, by President George W. Bush in November 2005.[19] His honorary titles include Knight Commander of the British Empire, bestowed in 2002 and Commander of the Légion d'honneur (Legion of Honor).
Greenspan's term as a member of the Board ended on January 31, 2006, and Ben Bernanke was confirmed as his successor. Bernanke is a former chairman of the U.S. President's Council of Economic Advisers, and his appointment is seen in part as a move to effect a smooth transition. He does disagree with Greenspan on the question of "inflation targeting," a practice in which the Fed makes public a projected inflation rate, effecting a greater transparency in likely Fed moves to raise or lower short-term interest rates. Inflation targeting arguably reduces certain forms of economic volatility.[20] Bernanke is for a targeted minimum level of inflation, Greenspan against.
Greenspan was famous for his ability to give technical and confusing speeches. U.S. News & World Report reported that, "Few can confuse Wall Street as thoroughly as Federal Reserve Board Chairman Alan Greenspan can."[17] Greenspan was sometimes so hard to understand that the Motley Fool radio show included a game called "What Did the Fed Chief Say?", where contestants were challenged to interpret snippets of Greenspan's speeches.[18] Greenspan mocked his own speaking style in 1988 when he said, "I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I said." To a central banker, being unclear is often an advantage since it grants more flexibility: if he is too predictable, markets are more willing to speculate in his future actions, and any move he makes will already be potentially priced into the economy. During his period at the Fed, Greenspan never publicly commented what algorithms or inflation and unemployment targets the Fed used in setting the interest rate. Despite this, over the years he built credibility in the financial markets that he was willing to fight inflation. The flexibility permitted him to affect the economy by, say, lowering interest rates in order to fight a recession while his credibility made it possible to do this without shocking the bond market.
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. He was previously appointed to the post by Presidents Ronald Reagan, George H. W. Bush and Bill Clinton. Greenspan was awarded the Presidential Medal of Freedom, the highest civilian award in the United States, by President George W. Bush in November 2005.[19] His honorary titles include Knight Commander of the British Empire, bestowed in 2002 and Commander of the Légion d'honneur (Legion of Honor).
Greenspan's term as a member of the Board ended on January 31, 2006, and Ben Bernanke was confirmed as his successor. Bernanke is a former chairman of the U.S. President's Council of Economic Advisers, and his appointment is seen in part as a move to effect a smooth transition. He does disagree with Greenspan on the question of "inflation targeting," a practice in which the Fed makes public a projected inflation rate, effecting a greater transparency in likely Fed moves to raise or lower short-term interest rates. Inflation targeting arguably reduces certain forms of economic volatility.[20] Bernanke is for a targeted minimum level of inflation, Greenspan against.
A leendő FED-elnök, Ben Bernanke első nyilatkozatában jelezte, elődje, a 18 évig a FED élén álló Alan Greenspan által fémjelzett monetáris politikát kívánja folytatni. Várhatóan még a hálaadás napja előtt sor kerül a Szenátus Bankbizottsága előtti meghallgatására a tegnap Bush elnök által megnevezett leendő FED-elnöknek, Ben Bernankénak. Hétfői első nyilatkozatában a jelölt jelezte, fő prioritásának az elődje, a 18 évig a FED élén álló Alan Greenspan által fémjelzett monetáris politikát kívánja folytatni. Közismert azonban, hogy ellentétben Greenspan-nel, Bernanke egy konkrét inflációs cél meghatározásának a híve, ami orientáló szereppel bírhat a piacok számára a jegybanki kamatlépésekről.
Alan Greenspan szerint a konkrét inflációs cél olykor behatárolja a jegybank mozgásterét például a teljes foglalkoztatottságra való törekvésnél. Szakértők szerint az előd és az utód közötti e kérdésről alkotott eltérő vélemény ellenére a FED kamatpolitikája várhatóan csak minimális mértékben változik majd. Az 51 éves Bernanke azonban a bizottsági meghallgatásán az inflációs cél melletti álláspontja miatt kemény meghallgatásra számíthat majd.
Alan Greenspan szerint a konkrét inflációs cél olykor behatárolja a jegybank mozgásterét például a teljes foglalkoztatottságra való törekvésnél. Szakértők szerint az előd és az utód közötti e kérdésről alkotott eltérő vélemény ellenére a FED kamatpolitikája várhatóan csak minimális mértékben változik majd. Az 51 éves Bernanke azonban a bizottsági meghallgatásán az inflációs cél melletti álláspontja miatt kemény meghallgatásra számíthat majd.
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