Alan Greenspan, the longtime Federal Reserve chairman known as “The Maestro” who became one of the most influential economic policy makers of his time and famously warned against “irrational exuberance,” has died. He was 100 years old.
The influential economist died Monday of complications from Parkinson’s disease, said his wife of 29 years, Andrea Mitchell, NBC News’ Washington correspondent and chief foreign affairs correspondent.
Mr. Greenspan was appointed Fed Chairman by President Ronald Reagan in 1987 and served in the role through recessions and booms until his retirement in 2006. His tenure was the second-longest, four months behind William McChesney Martin, who chaired the central bank from 1951 to 1970.
It was his unusual frankness in a televised speech on December 5, 1996 that caused a bit of market frenzy. Regarding the challenges of setting monetary policy, he said:
“How do we know that irrational exuberance has caused asset values to rise unduly and cause us to suffer an unexpected and prolonged contraction, as happened in Japan over the past decade?…We should neither underestimate nor become complacent about the complexity of the interaction between asset markets and the economy.”
The phrase “irrational exuberance” was interpreted as an indication that Mr. Greenspan believed the market was overvalued. The Tokyo stock market, which was open at the time, fell 3% in response to the comments, and other markets also fell thereafter. However, the market quickly recovered and continued to rise until the dot-com bust of 2001.
Years earlier, in 1974, when Mr. Greenspan was chairman of the White House Council of Economic Advisers, he had to explain on Capitol Hill why the administration was not creating inflation, as the Ford administration called the War on Price Rising. In the words of a certainly disconcerting greenspanism, he said, “It is a difficult problem to find the specific adjustment at the right time to stop the acceleration of the risk premium caused by falling incomes without prematurely halting the decline in the risk premium produced by inflation.”
Linton Weeks and John M. Berry wrote in March 1997, “Some people, especially the wealth managers who are raking in vast amounts of cash from mountain to mountain, think Greenspan a lot.” “They’re watching his every word, recording his every move, charting his every smile, because Alan Greenspan, second only to the president, is by far the most powerful person in this country. … He can choose a few words and send the stock market to heaven for a time, or he can send the stock market to heaven for a time. Hell.”
In an effort to avoid destabilizing markets and holding off the Fed’s hand until the time was right, Mr. Greenspan cloaked his remarks in language that would leave the sharpest minds scratching their heads, including the debaters in Congress.
“His long, complex sentences seem to end up taking away what they started out with and slipping into new levels of incomprehensibility,” Bob Woodward of the Washington Post wrote in his 2000 biography “Maestro: Greenspan’s Fed and America’s Boom.”
After leaving the Fed, Greenspan confessed to a strategy of using confusing language to provide clear explanations.
“It’s deliberately obfuscated language to avoid certain questions coming up that we know we can’t answer, and saying ‘I won’t answer’ or basically ‘no comment’ is actually the answer,” he said in a 2007 interview with CNBC. “So ultimately, for example, when a member of Congress asks a question; [you] I don’t want to say “no comment” or “I won’t answer” or anything like that. So I go on for four or five sentences and they get more and more confusing. The senator assumes I have answered the question and moves on to the next question. ”
Some people, particularly wealth managers who are raking in vast amounts of cash from mountain to mountain, think a lot about Greenspan. They watch his every word, record his every move, and chart his every smile. Because Alan Greenspan is probably the most powerful person in this country, second only to the president. … With just a few choice words, he can temporarily lead the stock market to heaven or hell. ”
Linton Weeks and John M. Berry
Washington Post, March 1997.
Greenspan was born on March 6, 1926 in Washington Heights, New York, to Jewish parents. His father was a stockbroker and financial analyst. As a boy in the 1930s during the Great Depression, the future Fed chairman received a quarter of his weekly allowance.
“Twenty-five cents was bought in far greater quantities back then than it is now,” Greenspan told an audience in 2003.
Greenspan played the clarinet and saxophone and briefly attended the Juilliard School. He played in Woody Herman’s jazz band (along with future White House staffer Leonard Garment) before enrolling at New York University, earning bachelor’s and master’s degrees in economics by 1950. In 1977, at the age of 51.
Greenspan’s teachers and mentors included future Federal Reserve Chairman Arthur Burns and free market advocate Ayn Rand, whom he was introduced to by his first wife, the artist Joan Mitchell.
alan greenspan
Andrew Haller Bloomberg | Getty Images
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, which he closed after being named Fed chairman. His 30-year tenure at Townsend Greenspan was interrupted when he served as chairman of President Gerald Ford’s Council of Economic Advisers from 1974 to 1977. From 1981 to 1983, he chaired the National Commission on Social Security Reform.
His first job as an economist paid him no more than his childhood pocket money. He received $45 a week.
The first of his five terms at the Fed began just before the 1987 financial crisis. The Senate approved his nomination to replace Paul Volcker on August 11.
That was just 69 days before “Black Monday” hit Wall Street on October 19th. The Dow Jones Industrial Average fell 508 points, or 22.6%, during trading, its largest single-day drop in history. The next day, Greenspan acknowledged that the Fed was ready to “be a source of liquidity that supports the economic and financial system.” His central bank has lowered short-term interest rates to encourage banks to lend on normal terms.
This strategy calmed fears and helped avert recession and banking crisis. Within two days, the Dow Jones Industrial Average had recouped more than 50% of its Black Monday losses. This bravado also helped Greenspan earn the nickname “Maestro” from supporters. Years later, critics blamed the conditions that led to the Great Recession on easy monetary policy, the “Greenspan put,” which he used to calm market panic.
“This is his economy, you idiot,” Fortune magazine declared in March 1996, throwing back the campaign slogan that President Bill Clinton used to defeat President George H.W. Bush four years earlier. The article’s headline read, “Greenspan Trusts Us.”
After that hot start, he led the Fed through two recessions: the 1997 Asian financial crisis, the 1998 Russian financial default, the 1998 bailout of hedge fund Long Term Credit Management, the September 11, 2001 attacks, and the dot-com boom and bust of the late 1990s to 2001.
He consistently placed more emphasis on fighting inflation than promoting full employment. While his supporters claim he presided over the longest economic expansion in U.S. history, critics say his low interest rate policies set the stage for the housing bubble and the Great Recession a year after his successor, Ben Bernanke, took over the Fed’s helm.
Greenspan told USA Today in 2007: “Sometimes you get criticized, and you deserve it. That’s part of the game.” “But in this case, I’m innocent.”
Mr. Greenspan admitted that he knew about questionable lending practices that encouraged subprime borrowers to choose risky adjustable-rate mortgages.
“I knew a lot of these practices were going on, but I didn’t realize until much later how important they had become,” he said in a 2007 interview on CBS’ “60 Minutes.” “I didn’t really understand it until quite late in 2005 and 2006.”
And in his best-selling memoir, “Turbulent Times,” he defended low-interest policies that encouraged people to buy homes, saying, “I believed then and now that the benefits of expanding homeownership were worth the risk. The protection of property rights so important to a market economy requires the necessary number of owners to maintain political support.”
Greenspan wrote this book by hand, mostly while soaking in the bathtub due to a back injury. In fact, most of his speeches were written that 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 and NBC journalist Andrea Mitchell, a fellow Washingtonian and classical music lover 20 years his junior, married in a ceremony officiated by the late Supreme Court Justice Ruth Bader Ginsburg.
In his 2007 memoir, he praised Presidents Ford and Clinton but harshly criticized President George W. Bush for not reining in spending.
President George W. Bush (left) and Alan Greenspan (right) after Ben Bernanke became chairman of the Federal Reserve System, February 6, 2006, in Washington.
Jim Watson | AFP | Getty Images
“There was little value placed on rigorous economic policy discussions or consideration of long-term effects,” the self-described liberal Republican wrote. “They traded power for principles. In the end, they got neither. They deserved to lose.”
He was also critical of President Donald Trump’s Fed bashing during his first term, aimed at lowering interest rates. In December 2019, shortly after President Trump tweeted against central banks, CNBC’s “Squawk on the “It’s wrong to even discuss this issue. The Federal Reserve is a very professional organization. They know much more than he does about how the economy works and how it affects money markets and the structure of interest rates. … The best thing to do is ignore it. I haven’t heard the president say this this morning.” I’m sure that was unwise. ”
In January 2026, during President Trump’s second term, Greenspan signed a joint statement with several other former Federal Reserve and Treasury officials condemning the criminal investigation of Federal Reserve Chairman Jerome Powell.
“The reported criminal investigation against Federal Reserve Chairman Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine his independence,” said the statement, which was supported by Greenspan and more than a dozen other signatories.
Mr. Greenspan recognized the limits of the Fed’s influence. In a 2008 CNBC interview, when asked whether central banks should be given more power to regulate investment banks, he said:
“Fundamentally, what I’m concerned about is that the Fed is given the role of overseeing the financial stability system. I don’t think anyone can do that. And what I’m most concerned about is that the Fed takes on that job and fails. As everyone else has done and will do, you can’t predict the future. I think that would undermine the credibility of the central banking system.”
Ultimately, he realized that despite all the science involved in economics, financial risk management cannot prevail in a meltdown situation like the Great Recession.
“Fear and euphoria are the dominant forces, and the magnitude of fear is many times greater than euphoria,” he told The Associated Press after publishing his book Maps and Territories 2.0 in 2013. “As the euphoria builds, the bubble rises very slowly. Then the fear sets in, and then it falls very quickly. When I started seeing it, I had a kind of intellectual shock. Contagion is the definitive phenomenon that causes things to fall apart.” ”
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