Alan Greenspan, former chairman of the Fed, dies at age 100

“Maestro” Alan Greenspan, who headed the Federal Reserve for 19 years under four presidents and mastered the art of obfuscation known as Fedspeak, has died. He was 100 years old.

The influential economist died Monday from complications of Parkinson’s Disease, said chief Washington correspondent and chief foreign affairs correspondent Andrea Mitchell, his wife of 29 years. NBC News.

Greenspan was appointed chairman of the Fed by President Ronald Reagan in 1987 and held the post through ups and downs until his retirement in 2006. His tenure was the second-longest, four months shorter than that of William McChesney Martin, who headed the central bank from 1951 to 1970.

To avoid shaking the markets or not showing the Fed’s hand until the time was right, Greenspan would cloak his words in language that would leave even the sharpest minds scratching their heads, including contentious members of Congress.

“His long, winding sentences seem to take away in the end what they initially give, as they flow toward new levels of inscrutability,” Bob Woodward of The Washington Post wrote in his 2000 biography “Maestro: Greenspan’s Fed and the American Boom.”

But his unusual candor in a televised speech on December 5, 1996 gave the market a bit of a boost. Discussing the difficulties of setting monetary policy, he said:

“How do we know when? irrational enthusiasm Have asset values ​​increased excessively and then suffered unexpected and prolonged contractions, as in Japan over the last decade? … We should not underestimate or be complacent about the complexity of the interaction between asset markets and the economy.”

The phrase “irrational enthusiasm” has been interpreted as a sign that Greenspan thought the market was overvalued. The Tokyo stock market, which was open at the time, lost 3% of its value following this comment, and other markets also fell. But markets recovered quickly and continued to rise until the dot-com crash of 2001.

Years earlier, in 1974, when he was chairman of the White House Council of Economic Advisers, Greenspan had to explain on Capitol Hill why the administration was not so successful. inflation is hitting nowAs Ford management calls the war against rising prices. In a decidedly confusing style of Greenspanism, he said: “It is a difficult problem to find the specific timing calibration that would be appropriate to arrest the acceleration of risk premiums created by falling incomes without prematurely stopping the decline in risk premiums created by inflation.”

Linton Weeks and John M. Berry wrote in The Washington Post in March 1997: “Some people, especially money managers who shovel large sums of money from one pile to another, think a lot about Greenspan.” arguably the most powerful person in the country. … With a few words, he can send the stock market to heaven or hell for a moment.”

Greenspan admitted in a clear statement to his strategy of using confusing language after retiring from the Fed.

“This is intentional obfuscation language to avoid raising some questions that you know you can’t answer, and saying ‘I won’t answer’ or basically ‘no comment’ is actually an answer,” he said in a 2007 interview on CNBC. “So, let’s say a member of Congress asks you a question, [you] I don’t want to say ‘No comment’ or ‘I won’t reply’ or anything like that. So I proceed with four or five increasingly vague sentences. “The congressman thinks I’ve answered the question and moves on to the next question.”

Greenspan was born on March 6, 1926, to a Jewish family in New York’s Washington Heights. His father was a stockbroker and financial analyst. As a child growing up during the Great Depression in the 1930s, the future Fed chairman received an allowance of a quarter a week.

“Twenty-five cents, let me tell you, that bought a lot more than it does these days.” Greenspan told the audience: In 2003.

Greenspan played clarinet and saxophone and briefly attended the Juilliard School. He played in Woody Herman’s jazz band (like Leonard Garment, another future White House official) before enrolling at New York University, where he earned bachelor’s and master’s degrees in economics in 1950. He eventually earned his doctorate. In 1977 – 51 years old.

His teachers and mentors included future Fed Chairman Arthur Burns and free-market advocate Ayn Rand, to whom Greenspan was introduced by his first wife, the artist Joan Mitchell.

By the time he earned his doctorate, he had worked at Brown Brothers Harriman, the National Industrial Conference Board, and the consulting firm Townsend-Greenspan. closed After being nominated for the Fed chairmanship. His three-decade tenure at Townsend-Greenspan was interrupted by his stint as chairman of President Gerald Ford’s Council of Economic Advisers from 1974 to 1977. He was chairman of the National Commission on Social Security Reform from 1981 to 1983.

His first job as an economist didn’t pay much more than his childhood allowance: He was getting $45 a week.

The first of his five terms at the Fed began just before the 1987 financial crisis. The Senate confirmed his nomination to replace Paul Volcker on August 11.

This was just 69 days before “Black Monday” crushed Wall Street on October 19th. The Dow Jones Industrial Average fell 508 points (22.6%) in the session, marking the largest one-day selloff in history. The next day, Greenspan confirmed that the Fed was ready “to serve as a source of liquidity to support the economic and financial system.” The central bank lowered short-term interest rates to encourage banks. lend money on ordinary terms.

The strategy helped calm tensions and prevent a recession and banking crisis. Within two days, the Dow regained more than 50% of its Black Monday losses. Courage also helped Greenspan earn his nickname”Maestro” from his supporters. Years later, critics blamed easy money policy – “Greenspan put it.“ It was helping to calm market panics caused by the conditions that brought about the Great Recession.

“It’s his economy, stupid,” Fortune magazine declared in March 1996, throwing back at President Bill Clinton the campaign slogan he had used to defeat President George H. W. Bush four years earlier. “We Trust Greenspan” The title of the article said.

After that troubled start, it led the Fed into two recessions: the 1997 Asian financial crisis, the 1998 Russian fiscal default, the 1998 bailout of hedge fund Long Term Credit Administration, the September 11, 2001 terrorist attacks, and the dot-com boom and bust of the late ’90s through 2001.

Throughout, he focused on fighting inflation rather than promoting full employment. While his supporters say he presided over the longest economic expansion in U.S. history, critics said Greenspan’s low interest rate policies set the stage for the housing bubble that turned into the Great Recession a year after his successor, Ben Bernanke, took over the Fed helm.

“Sometimes I get criticized and I deserve to be criticized, and that’s part of the game,” Greenspan told USA Today in 2007. this time i’m innocent“

Greenspan acknowledged this knew questionable lending practices This encouraged subprime borrowers to turn to risky, adjustable-rate mortgages.

“While I was aware that many of these practices were continuing, I had no idea how important they had become until very late,” he said in a 2007 interview on CBS’ “60 Minutes.” “I didn’t really understand it until late 2005 and 2006.”

And in his best-selling memoir “The Age of Turbulence,” he defended the low-interest policy that encouraged people to buy homes: “I believed then, as now, that the benefits of expanding homeownership were worth the risk. Protecting the property rights so critical to a market economy requires a critical mass of property owners to maintain political support.”

Greenspan wrote the book mostly while soaking in the bathtub due to a back injury. In fact, most of his speeches were written this way after he injured his back in 1971.

After leaving the Fed, Greenspan founded his own consulting firm, Greenspan Associates.

Greenspan’s first marriage ended in divorce after less than a year. In 1997, he married NBC journalist Andrea Mitchell, also a Washington resident and classical music enthusiast 20 years his junior, in a ceremony officiated by the late Supreme Court Justice Ruth Bader Ginsburg.

In his 2007 memoirs, he praised presidents Ford and Clinton but harshly criticized President George W. Bush for failing to rein in spending.

“There was little value in rigorous discussion of economic policy or weighing long-term consequences,” the self-described libertarian Republican wrote. “They replaced principle with force. In the end, they got neither. They deserved to lose.”

He also criticized President Donald Trump’s early attack on the Fed for lowering interest rates. Appearing on CNBC’s “Squawk on the Street” shortly after Trump’s tweet targeting the central bank in December 2019, Greenspan said: “He’s wrong to even discuss the issue. The Federal Reserve is a very professional team. They know a lot more than he does about how the economy works, how it affects money markets and the interest rate structure. … The best thing to do is ignore it. I didn’t hear the president make a statement this morning.” I’m sure that’s bad advice.”

During Trump’s second term in January 2026, Greenspan signed a joint statement with a handful of former Fed and Treasury officials to condemn the criminal investigation into Fed Chairman Jerome Powell.

“The reported criminal investigation into Federal Reserve Chairman Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” the statement, backed by Greenspan and more than a dozen other signatories, said. The statement was included.

Greenspan was aware of the limits of the Fed’s influence. When asked in a 2008 interview on CNBC whether the central bank should be given more authority to regulate investment banks, he replied:

“What concerns me is basically the Fed being given the role of overseeing the financial stability system. I don’t think anyone can do that, and most of all if the Fed takes on that job and fails, as everyone else has and will do, you can’t predict the future. I think that undermines the credibility of the central banking system.”

Ultimately, he realized that despite all the science about economics, financial risk management could not win in crisis situations such as the Great Recession.

“Fear and enthusiasm are the dominant forces, and fear is many times greater than enthusiasm.” he told the Associated Press After the publication of his book “Map and Territory 2.0” in 2013. “The bubbles rise very slowly as euphoria builds. Then fear hits and it subsides very sharply. When I started looking at this, I was intellectually shocked. Contagion is a critical phenomenon that causes everything to fall apart.”