Alan Greenspan, who served nearly two decades as chairman of the Federal Reserve and became one of the most consequential economic policymakers in American history, died on June 22 at his home in Washington, D.C. He was 100 years old.
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“Alan passed away at our home this morning at the age of 100 from complications of Parkinson’s Disease,” said his wife of 29 years, NBC News chief Washington correspondent Andrea Mitchell, 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.”
Greenspan served five terms as the 13th chairman of the Federal Reserve, spanning the administrations of four presidents, from Ronald Reagan to George W. Bush, making him the second-longest-serving Fed chairman in history, behind William McChesney Martin. His 18-and-a-half-year tenure spanned some of the most turbulent and prosperous periods of the U.S. economy, including the longest economic expansion in U.S. history, which lasted from 1991 to 2001.
Born March 6, 1926, in the Washington Heights neighborhood of New York City, Greenspan demonstrated a gift for mathematics from an early age, reportedly able to recite baseball batting averages and perform complex calculations in his head. As a young man, he enrolled at the Juilliard School, where he studied saxophone and clarinet, and briefly played jazz professionally before turning his attention to economics. He earned his bachelor’s and master’s degrees from New York University and began doctoral work at Columbia University under economist Arthur F. Burns, a future Fed chairman himself. He later completed his Ph.D. at NYU in 1977.
Before his rise to economic prominence, Greenspan had an unlikely intellectual companion in Ayn Rand, the novelist and philosopher behind Atlas Shrugged and the founder of the objectivist movement. Greenspan met Rand in 1952 and became a member of her inner circle, embracing her philosophy of radical self-interest and laissez-faire capitalism. The relationship was personal as much as intellectual, and Rand’s influence on his economic thinking stayed with him long after her death in 1982.
Before arriving at the Fed, Greenspan spent decades in private consulting. He founded Townsend-Greenspan & Co. in the mid-1950s, an economic consulting firm that advised some of the country’s largest corporations. He also served as chairman of the Council of Economic Advisers under President Gerald Ford from 1974 to 1977.
President Reagan nominated Greenspan to succeed Paul Volcker as Fed chairman in June 1987, and the Senate confirmed him that August. It did not take long for Greenspan to be tested in his new role. Two months into the job, he had to deal with Black Friday, when the Dow Jones Industrial Average dropped 508 points on October 19, 1987, wiping out 22% of the market’s value in a single session. Greenspan moved quickly to reassure markets, pledging the Fed’s readiness to provide liquidity, and Wall Street eventually recovered. The episode established his reputation as a steady hand in a crisis.
His tenure took on an almost mythological quality in the 1990s, as the U.S. economy surged through the longest peacetime expansion in its history. He became a fixture of Washington power, universally consulted and almost universally deferred to. Economists Alan Blinder and Ricardo Reis once observed that between 1998 and 2004, there were just 14 recorded dissents from Greenspan’s positions at Federal Open Market Committee votes, noting that “under the Greenspan standard, his rule is rarely questioned.” His public statements were famously impenetrable, a style he openly acknowledged as intentional. He described it in 2007 as “a language of purposeful obfuscation to avoid certain questions coming up, which you know you can’t answer.” The press dubbed it “Fedspeak.”
Greenspan’s legacy was not without controversy. His tenure ended in January 2006, and less than two years later, the U.S. economy was in freefall, with the housing market at the center of the collapse. Some critics pointed to the low interest rates of the early 2000s as having inflated the bubble, while others questioned whether the Fed had done enough to flag risks building in the mortgage market. Greenspan himself acknowledged in 2008 congressional testimony that he had found “a flaw” in his thinking, calling the crisis a “once-in-a-century credit tsunami.” The debate over what caused it has never been fully settled.
The Federal Reserve, in a statement on his death, said Greenspan “brought rigorous analytical discipline to monetary policymaking and helped establish the credibility that remains one of the Federal Reserve’s most important assets.”
Jay Caruso (@JayCaruso) is a writer living in Florida.
