Alan Greenspan

3 Books

Alan Greenspan is an American economist and from 1987 to 2006 chairman of the Board of Governors of the Federal Reserve of the United States. He currently works as a private advisor, making speeches and providing consulting for firms through his company, Greenspan Associates LLC.

First appointed Fed chairman by President Ronald Reagan in August 1987, he was reappointed at successive four-year intervals until retiring after a record-setting tenure on January 31, 2006, at which time he relinquished the chairmanship to Ben Bernanke. Greenspan was lauded for his handling of the Black Monday stock market crash that occurred very shortly after he first became chairman, as well as for his stewardship of the Internet-driven, "dot-com" economic boom of the 1990s.[citation needed] This expansion culminated in a stock market bubble burst in March 2000 followed by a recession beginning in late 2000 and continuing through 2002.

From 2001 until his retirement from the Fed, he was increasingly criticized for some statements seen as overstepping the Fed's traditional purview of monetary policy, and viewed by others as overly supportive of the policies of President George W. Bush, as well as for policies seen by Business Week Magazine and others as leading to a housing bubble. During his tenure Greenspan was considered to be the leading authority on American domestic economic and monetary policy, and his active influence continues to this day.

Interviews

AUTHOR INTERVIEWS

Greenspan: 'I Probably Could Have Caught' Economic Crises

October 18, 20138:18 AM ET

Heard on Morning Edition

Alan Greenspan was celebrated as a master of monetary policy during his long chairmanship of the Federal Reserve, from 1987 to 2006. But policies put in place during Greenspan's tenure have been blamed by some for the financial crisis that began shortly after he left, and the so-called Great Recession.

Greenspan, 87, now president of Greenspan Associates LLC, a consulting firm, talks with Morning Edition host Renee Montagne about his new book, The Map and the Territory: Risk, Human Nature, and the Future of Forecasting, and discusses why he says it is so difficult for even experts to predict economic calamity.

Interview Highlights

On why top government economists didn't foresee the economic collapse, despite years of warnings from some business journalists who pointed to predatory lending and other signs

It's not that we didn't see it. I, for example, was saying in 2001, 2002, that the big surge in housing financed by mortgage debt, can't continue. But it went on for four more years. One of the things I try to designate in the book is why it is so difficult to catch these actual crisis periods. I probably could have caught a number of different crises. I came very close in the dotcom boom. I did not come close at all on the housing boom. You're talking in terms of the roof was falling, and after a while you stop saying so, because the roof never fell.

On lessons from the 2008 collapse of Lehman Brothers, one of the nation's largest investment banks

You'd need government regulation to set up the capital standards because most banks, as I've seen, will fight endlessly trying to get as little capital requirements as possible. If you're thinking in terms of the period when we all thought that people acted in their long-term self-interest, you can demonstrate in that hypothetical case that you need no regulations at all. It will be automatic. But that's not the way the world works. The premises that I believed prior to 2008 I had to discard because the evidence definitely said I was wrong.

On why he believes that lifting some new financial regulations and returning to a mode of "creative destruction" could help the economy

The only way you get economic progress, real standards of living moving higher, is to have the savings of the society continuously invested in the cutting-edge technologies. And those technologies which are obsolescent get dropped out. That's the destruction part of creative destruction. But that has a downside to it. There are winners and there are losers. And as much as we would like to help the losers, if we do it in the way that directs the limited capital of the society to support the low productivity parts of the economy, it means that the rest of the economy — our overall standard of living — will not rise as much as it could. So that is a very difficult trade-off here.

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