Alan Greenspan, economist and longtime head of the Federal Reserve, dies at 100
The influential economist died Monday from complications of Parkinson’s disease, said his wife of 29 years, NBC News correspondent Andrea Mitchell.
He was number # 360
Alan Greenspan, the influential economist who steered U.S.
monetary policy during his five terms as chairman of the Federal Reserve under
four presidents, died Monday, according to his wife, NBC News correspondent
Andrea Mitchell.
He was 100.
Greenspan helped define modern American capitalism from the
final years of the Cold War-era through the dawn of the digital age. He
presided over the Fed during one of the longest economic expansions in U.S.
history, a boom stretching from 1991 to 2001. But he was also faulted for
decisions that critics say created the conditions for the global financial
crisis of 2007-08, such as advocating for deregulation of the financial sector.
Mitchell, the chief Washington correspondent and chief
foreign affairs correspondent for NBC News, announced her husband’s death in a
statement. They were married for 29 years.
“Alan passed away at our home this morning at the age of 100
from complications of Parkinson’s disease,” Mitchell said in a statement. “He
was a giant of a man who helped shape the U.S. economy for decades under
presidents of both parties, but was always honest in acknowledging his
mistakes,” she said.
“To me he was my husband, who shaped my life from our very
first date in 1984. He had ‘irrational exuberance’ for baseball, the Washington
Commanders, tennis, golf and music, especially jazz,” Mitchell added. “He will
be remembered for his brilliance and his kindness. Being his life partner was
the joy of my life.”
In a statement, the Fed extended condolences to Mitchell and
said Greenspan’s “contributions to monetary policy and economic thought left a
lasting mark on this institution, on the broader field of economics, and on the
country.”
Greenspan was born March 6, 1926, in the Washington Heights
neighborhood of New York City, where he showed mathematical acumen from a young
age. In his early years, he attended the Juilliard School and played jazz
saxophone and clarinet in a band.
He studied economics at New York University, earning a
bachelor’s degree in 1948 and a master’s in 1950, and then started work on a
doctorate at Columbia University under economist Arthur F. Burns, a future
chairman of the Federal Reserve.
In the early 1950s, Greenspan became an associate of the
“Atlas Shrugged” writer Ayn Rand, whose “objectivist” philosophy of
self-interest and laissez-faire capitalism inspired future generations of
political libertarians and conservatives. Greenspan embraced some of her
beliefs and paid tribute to her in his 2007 memoir.
“Ayn Rand and I remained close until she died in 1982, and
I’m grateful for the influence she had on my life. I was intellectually limited
until I met her,” Greenspan wrote in “The Age of Turbulence: Adventures in a
New World.”
Greenspan left Columbia in 1953 and joined an economic
consulting firm that became known as Townsend-Greenspan Co., Inc. Five years
later, he became president and chief owner of the firm.
Greenspan’s initial foray into the political world came in
1967 when he served as an adviser on Richard Nixon’s 1968 presidential
campaign. He assisted with Nixon’s transition to the Oval Office but turned
down an official role in the administration.
He advised Nixon on an informal basis and, following Nixon’s
resignation in 1974, took a position in President Gerald Ford’s administration
as chairman of the Council of Economic Advisers, serving until 1977. He pursued
policies that, together with tighter monetary policy from the Paul Volcker-led
Federal Reserve, helped reduce inflation from 11% to 6.5%.
In 1977, at the dawn of Jimmy Carter’s presidency, Greenspan
returned to his consulting firm in New York and accepted an adjunct
professorship at New York University, where he received a Ph.D. in economics.
Greenspan returned to government service when President
Ronald Reagan appointed him to fill Volcker’s term as chairman of the Federal
Reserve. Greenspan’s nomination was confirmed by the Senate on Aug. 11, 1987,
during Reagan’s second term.
On Oct. 19, 1987, or “Black Monday,” when the Dow Jones
Industrial Average plummeted by more than 22% — the blue-chip index’s largest
one-day percentage fall ever — Greenspan moved swiftly to keep the markets
liquid. From then on, Fed moves to support financial markets through episodes
of instability became known as the “Greenspan put.”
He drew praise for steering the economy through what was
then the longest expansion in U.S. history, running roughly from March 1991 to
the first quarter of 2001, a transformative period that saw the acceleration of
globalization and the rise of the internet. Greenspan navigated the Fed through
seminal events, including the “dotcom” bubble burst and the aftermath of the
Sept. 11, 2001, terrorist attacks.
He achieved celebrity status when stocks soared to record
levels under President Bill Clinton. The writer Christopher Hitchens called him
“America’s least-likely celebrity,” The Economist magazine dubbed him a “rock
star,” and his admirers called him “the maestro.”
Greenspan, who served five consecutive four-year terms,
retired Jan. 31, 2006. He has the second-longest tenure as Fed chair, behind
William McChesney Martin, who served from 1951 to 1970.
In the wake of the financial collapse of 2007-08, Greenspan
drew scrutiny for decisions that some critics believe set the stage for the
meltdown. Despite his infamous warning in 1996 that “irrational exuberance” was
unduly inflating stock prices, he was faulted for missing the early-2000s
housing bubble.
In 2011, the bipartisan Financial Crisis Inquiry Commission
determined that the crisis was triggered in part by Greenspan’s failure to
discourage trade in securities backed by subprime mortgage loans amid an
unsustainable housing boom and his promotion of financial industry
deregulation.
“More than 30 years of deregulation and reliance on
self-regulation by financial institutions, championed by former Federal Reserve
chairman Alan Greenspan and others, supported by successive administrations and
Congresses, and actively pushed by the powerful financial industry at every
turn, had stripped away key safeguards, which could have helped avoid
catastrophe,” the report said in part.
In testimony to the House Committee on Oversight and
Government Reform in October 2008, Greenspan referred to the financial crisis
as a “once-in-a-century credit tsunami.”
“The crisis, however, has turned out to be much broader than
anything I could have imagined,” he acknowledged.
After leaving the Fed, Greenspan started his own consulting
company in Washington and authored several books.
He shared his impressions of the presidents he had worked
with in his memoir “The Age of Turbulence” and in interviews. Nixon was smart
but paranoid, he said. Ford “was a genuinely nice man who was not ruthlessly
ambitious,” he said in a 2009 interview.
Reagan, the president who nominated him, “fervently believed
in, and acted on, a small number of important principles,” he said in remarks
at the Reagan Library in 2003.
Despite being a lifelong Republican, Greenspan had a strong
relationship with Clinton, a Democrat, and praised his intelligence and fiscal
discipline. Clinton, he joked, “was the best Republican president we’ve had in
a while.”
His relationships with George H.W. Bush and George W. Bush
were more complicated. The elder Bush blamed Greenspan publicly for the poor
economy that likely contributed to his election loss, which Greenspan said in
his book “surprised” him.
Greenspan said he was disappointed in the younger Bush for
failing to rein in the budget with a GOP-controlled Congress, and that
Republicans deserved it when they lost control of both chambers in the 2006
midterms. “The Republicans in Congress lost their way. They swapped principle
for power. They ended up with neither,” he wrote in his book.
Greenspan’s successors as Fed chair include Ben Bernanke,
Janet Yellen, Jerome Powell and, as of May, Kevin Warsh, who was appointed by
President Donald Trump.
Greenspan received various national and international
accolades: In 2000, the French government awarded him the Legion of Honor; and
in 2002, Queen Elizabeth II named him an honorary Knight of the British Empire.
He was awarded the U.S.’ highest civilian honor, the Presidential Medal of
Freedom, by the younger Bush in 2005.
The Fed, in its statement on Greenspan’s death, said he
“brought rigorous analytical discipline to monetary policymaking and helped
establish the credibility that remains” one of the central bank’s “most
important assets.”
“Chairman Greenspan’s legacy endures at the Federal
Reserve—in those he mentored directly, in the economists and public servants he
inspired, and in the frameworks and practices he helped shape,” the Fed added.
