Alan Greenspan

Alan Greenspan
Greenspan
Alan Greenspan
Born	6 3, 1926
Birthplace	New York City, U.S.
Nationality	American
Occupation	Economist, central banker, consultant
Title	Chairman of the Federal Reserve
Known for	13th Chairman of the Federal Reserve (1987–2006)
Education	Ph.D., New York University (1977)
Spouse(s)	Template:Plainlist
Awards	Presidential Medal of Freedom (2005)

Alan Greenspan (born March 6, 1926) is an American economist who served as the 13th Chairman of the Federal Reserve from August 11, 1987, to January 31, 2006 — the second-longest tenure in the position, behind only William McChesney Martin. Over nearly two decades at the helm of the United States' central bank, Greenspan presided over some of the most consequential economic episodes in modern American history, including the stock market crash of 1987, the dot-com bubble, and the early stages of the housing boom that would culminate in the subprime mortgage crisis. Before joining the Federal Reserve, he served as the 10th Chairman of the Council of Economic Advisers under President Gerald Ford from 1974 to 1977 and ran a successful economic consulting firm. First nominated to the Fed by President Ronald Reagan, Greenspan was reappointed by Presidents George H. W. Bush, Bill Clinton, and George W. Bush before retiring in 2006, when Ben Bernanke succeeded him. Though he was subdued in his public appearances, favorable media coverage elevated his profile to a point where several observers likened him to a "rock star." His legacy remains a subject of significant debate among economists and policymakers, particularly regarding the role of monetary policy in fueling asset bubbles.

Early Life

Alan Greenspan was born on March 6, 1926, in New York City. He grew up in the Washington Heights neighborhood of Manhattan. His parents, Herbert Greenspan and Rose Goldsmith, were of Jewish descent. His parents divorced when he was young, and Greenspan was raised primarily by his mother in her parents' household.

From an early age, Greenspan showed aptitude in mathematics and music. He attended George Washington High School in New York City, where he excelled academically. As a young man, he pursued music seriously, studying the clarinet and saxophone, and briefly attended the Juilliard School of Music (now the Juilliard School) before deciding to shift his focus to economics.

Greenspan's intellectual development was shaped significantly by his association with the novelist and philosopher Ayn Rand, whose circle of followers, known informally as "The Collective," included Greenspan during the 1950s and 1960s. Rand's objectivist philosophy — with its emphasis on free-market capitalism, individual liberty, and limited government intervention — left a lasting imprint on Greenspan's economic thinking. In 1966, Greenspan contributed an essay titled "Gold and Economic Freedom" to Rand's newsletter, in which he argued for the gold standard and criticized the welfare state and central banking for their inflationary tendencies. This essay would later attract significant attention given Greenspan's subsequent career as the head of the very institution he had once criticized.

Education

Greenspan attended New York University (NYU), where he earned a Bachelor of Science degree in economics summa cum laude in 1948 and a Master of Arts degree in economics in 1950. He subsequently enrolled in doctoral studies in economics at Columbia University, where he studied under Arthur Burns, who himself would later serve as Chairman of the Federal Reserve. Greenspan did not complete his doctorate at Columbia at that time.

He eventually returned to NYU to complete his Ph.D. in economics, which he received in 1977. His doctoral dissertation was titled "Papers on Economic Theory and Policy." The dissertation was unusual in that it comprised a collection of previously published papers and essays rather than a single monograph.

Career

Early Career and Consulting

After completing his master's degree, Greenspan embarked on a career in economic analysis and consulting. In 1954, he co-founded the economic consulting firm Townsend-Greenspan & Co., Inc., where he served as president and chairman for nearly three decades. The firm provided economic forecasting and analysis to a range of corporate clients, and Greenspan developed a reputation as a meticulous data analyst with deep expertise in industrial and financial statistics.

During this period, Greenspan became increasingly involved in Republican Party politics and policy circles. His expertise in economic data and his free-market orientation brought him to the attention of senior political figures.

Chairman of the Council of Economic Advisers

In 1974, President Gerald Ford appointed Greenspan as the 10th Chairman of the Council of Economic Advisers (CEA), a position he held from September 4, 1974, to January 20, 1977. He succeeded Herbert Stein in the role and was himself succeeded by Charles Schultze when the Carter administration took office. During his tenure at the CEA, Greenspan advised President Ford on economic policy during a period marked by stagflation — the combination of high inflation, high unemployment, and slow economic growth that plagued the American economy in the mid-1970s.

Chairman of the Federal Reserve

Appointment and Early Tenure

President Ronald Reagan nominated Greenspan to serve as Chairman of the Federal Reserve in August 1987, succeeding Paul Volcker. Greenspan took office on August 11, 1987, and just two months into his tenure faced his first major crisis: the stock market crash of October 19, 1987, known as Black Monday, when the Dow Jones Industrial Average fell by more than 22% in a single trading session. Greenspan's response — issuing a brief but firm statement that the Federal Reserve stood ready to serve as a source of liquidity to support the economic and financial system — was credited with helping to stabilize markets and prevent a broader economic collapse. This early success established Greenspan's reputation as a steady hand in crisis management.

The 1990s Expansion

Throughout the 1990s, Greenspan oversaw what became one of the longest periods of economic expansion in American history. He attracted attention for his willingness to allow the economy to grow without raising interest rates aggressively, based on his observation that productivity gains — driven in part by the technology revolution — were holding down inflationary pressures even as unemployment fell to historically low levels. This judgment proved largely correct through much of the decade, and Greenspan's reputation grew accordingly.

Greenspan became known for his carefully crafted, often deliberately opaque public statements. His testimony before Congress and his speeches to financial audiences were parsed word by word for hints about future monetary policy. He himself acknowledged this tendency toward ambiguity, famously remarking, "I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said."

The favorable economic conditions of the 1990s, combined with Greenspan's perceived deft handling of various financial disruptions — including the 1994 bond market crisis, the 1997 Asian financial crisis, and the 1998 collapse of Long-Term Capital Management — elevated his public standing. Media coverage portrayed him as an almost oracular figure, with the Houston Chronicle noting that he enjoyed "rock star renown."

The "Greenspan Put" and the Dot-Com Bubble

Critics of Greenspan's approach at the Federal Reserve have focused on the concept known as the "Greenspan put" — the perceived willingness of the Fed to lower interest rates or otherwise intervene to support financial markets during periods of stress, effectively creating a floor under asset prices. This concept, critics argued, encouraged excessive risk-taking by investors who believed the central bank would always step in to prevent major losses.

In December 1996, Greenspan gave a speech in which he asked whether "irrational exuberance" had unduly escalated asset values — a phrase that became iconic in the lexicon of financial history. Despite this warning, the Federal Reserve did not take decisive action to curb the stock market bubble that was forming in technology shares. The dot-com bubble continued to inflate through the late 1990s before collapsing in 2000 and 2001.

In the aftermath of the dot-com crash, Greenspan and the Federal Reserve cut interest rates aggressively, bringing the federal funds rate down to 1% by mid-2003. In his testimony before Congress in February 2002, Greenspan discussed the economic outlook and the Fed's response to the recession and the September 11 attacks. He also addressed economic conditions in his July 2002 congressional testimony.

The Housing Bubble and Subprime Mortgage Crisis

The low interest rate environment that followed the dot-com crash has been identified by numerous economists and analysts as a contributing factor to the housing bubble that developed in the mid-2000s. Yale economist Robert Shiller argued that "once stocks fell, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed."

Greenspan addressed the housing market in a May 2005 speech, discussing risk transfer and financial stability. The BBC reported on Greenspan's observations about a housing "froth" in the market, though Greenspan was careful to distinguish between localized bubbles and a nationwide housing bubble.

Greenspan has defended his record, arguing that the housing bubble was not a result of low short-term interest rates but rather a worldwide phenomenon caused by the progressive decline in long-term interest rates, which he attributed to the relationship between high savings rates in the developing world and lower savings rates in the developed world. A Federal Reserve staff paper published in 2007 explored some of these monetary policy questions.

The subprime mortgage crisis, which erupted in 2007 — within a year of Greenspan's departure from the Fed — and the subsequent global financial crisis of 2008 significantly affected Greenspan's reputation. The Wall Street Journal noted that the crisis "tarnished his reputation." In October 2008, Greenspan testified before Congress and acknowledged that there had been a "flaw" in his free-market ideology, stating that he had found "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."

Reappointments and Senate Confirmation

Greenspan was reappointed as Federal Reserve Chairman at successive four-year intervals. The Deseret News reported on a U.S. Senate panel vote approving Greenspan's fourth term as Fed chairman. He served under four presidents — Reagan, George H. W. Bush, Clinton, and George W. Bush — before retiring on January 31, 2006.

Political Controversies

Despite the tradition of Federal Reserve independence from partisan politics, Greenspan drew criticism from Democratic leaders in Congress for what they characterized as politicizing his office. This criticism centered on his public support for Social Security privatization and tax cuts, positions that aligned more closely with Republican policy priorities.

Greenspan also weighed in on immigration policy, arguing that the H-1B visa cap would create a "privileged elite" among U.S. workers and calling for expanded high-skilled immigration to maintain American economic competitiveness.

Post-Federal Reserve Career

After leaving the Federal Reserve in January 2006, Greenspan established Greenspan Associates LLC, a private consulting firm through which he provided advisory services to corporations and financial institutions. He joined Deutsche Bank as an adviser, a role announced by the bank in 2007.

Greenspan published his memoir, The Age of Turbulence: Adventures in a New World, in 2007, in which he discussed his career, his economic philosophy, and his views on the major policy issues of his time. The book attracted significant media attention, particularly for Greenspan's candid assessments of the presidents he had served under and his commentary on the Iraq War.

He has remained engaged in public discourse on economic matters. In September 2025, Greenspan was among every living former Fed chair who signed a brief supporting Federal Reserve Governor Lisa Cook in her legal battle to keep her position, a case before the Supreme Court.

Personal Life

Greenspan married artist Joan Mitchell in 1952; the marriage was annulled in 1953. He married NBC News journalist Andrea Mitchell in 1997. Their relationship attracted public interest given Mitchell's prominent role covering politics and Greenspan's position as one of the most powerful economic policymakers in the world. Farm Progress described Mitchell as Greenspan's "long-time NBC" journalist wife.

Greenspan is a member of the Council on Foreign Relations.

Recognition

In 2005, Greenspan received the Presidential Medal of Freedom, the highest civilian honor in the United States, from President George W. Bush. The Wharton School of the University of Pennsylvania also honored Greenspan, as noted in a 2005 news release.

During his tenure at the Federal Reserve, Greenspan was one of the most recognized figures in global finance. Barron's published extensive analyses of his tenure and policies. The BBC noted his significance in global economic policymaking.

Sebastian Mallaby's biography The Man Who Knew: The Life and Times of Alan Greenspan (2016) provided a comprehensive account of Greenspan's career and influence. A review by the Independent Institute noted that "aside from the Great Depression, Alan Greenspan's tenure at the Federal Reserve may be the most studied period of U.S. central banking."

Legacy

Alan Greenspan's legacy remains one of the most debated in the history of American economic policy. During his tenure, he was regarded as an exceptionally influential figure in global finance, and his pronouncements moved markets around the world. The economic expansion of the 1990s, during which inflation remained low, unemployment declined, and productivity surged, was seen by many as a vindication of his monetary policy approach.

However, the financial crisis of 2007–2008 prompted a significant reappraisal of Greenspan's tenure. Critics argued that the Fed's low interest rate policies following the dot-com crash, combined with insufficient regulation of mortgage lending and complex financial instruments, helped create the conditions for the housing bubble and the subsequent financial crisis. Greenspan's 2008 congressional testimony, in which he acknowledged a "flaw" in his economic worldview, marked a notable moment in this reassessment.

Greenspan's influence on the debate about central bank policy continues to resonate. The concept of the "Greenspan put" has entered the permanent lexicon of finance, and discussions about the appropriate role of the Federal Reserve in managing asset bubbles frequently reference his tenure. The Financial Times observed in 2025 that the debate over the relationship between monetary policy, productivity growth, and inflation — themes central to Greenspan's chairmanship — remains relevant as policymakers consider rate decisions. Oxford Economics, in assessing the nomination of Kevin Warsh as a potential new Fed chair, explicitly asked whether Warsh could "pull off a Greenspan" — using Greenspan's name as shorthand for a period of sustained growth managed through deft monetary policy. The Financial Times further reported that Warsh "channels Alan Greenspan" in his bet on artificial intelligence-driven productivity gains as a basis for economic growth and rate cuts.

Greenspan's name has also entered popular culture. In 2025, a video game called Federal Reserve Simulator allowed players to assume the role of a Fed chair attempting to manage the economy, with Greenspan among the playable characters.

Whether viewed as a master of monetary policy who guided the American economy through an era of unprecedented prosperity or as a figure whose free-market ideology blinded him to the risks accumulating in the financial system, Greenspan's nearly two-decade tenure at the Federal Reserve remains a defining chapter in the history of American central banking.