MikeLigalig.com

By Holly Lane - highbeam.com

History (Birth to 1987)

Alan Greenspan was born in New York City on March 6, 1926, an only child of Jewish parents Herbert and Rose Greenspan. Greenspan's parents divorced when he was young and he was primarily raised by his mother. Growing up, Greenspan was very interested in music and, in 1944, he entered the Julliard School of Music to study the clarinet. Less than one year later, Greenspan dropped out of Julliard in order to tour with a swing band by the name of "Henry Jerome and His Orchestra." While travelling with the Henry Jerome band, Greenspan became increasingly interested in mathematics and economics, and his role as the band's bookkeeper and tax accountant gradually overshadowed his role as a clarinet player and saxophonist. While his band mates went out partying, Greenspan preferred to stay in his hotel room, reading books on business and the economy. In September of 1944, Greenspan made the decision to quit the band and enroll in the economics program at New York University. He earned his Bachelor of Science degree in economics in 1948, and his Master of Arts degree in economics in 1950, both from New York University.

Greenspan enrolled in a PhD program at Columbia University and took a job with the National Industrial Conference Board to pay his tuition. However, he was unable to afford his continued education and, in 1953, had to drop out of Columbia. During his time at Columbia, Greenspan befriended Arthur Burns, an economist who would eventually become chairman of the Federal Reserve Board, and dated an artist named Joan Mitchell, who introduced him to Ayn Rand. Rand was a serious philosophical writer, whose ideas on the moral foundation of capitalism greatly inspired Greenspan's subsequent approach to American business economics.

In 1954, Greenspan partnered with William Townsend to form a consulting firm called Townsend-Greenspan and Co., Inc. Townsend-Greenspan specialized in providing businesses with financial and industrial forecasts, and was almost instantly a success, making Greenspan a very wealthy man. Riding on his business's success, Greenspan became a highly sought-after advisor, and served as a board member for high-profile corporations like J.P. Morgan and Mobil. William Townsend died in 1958, leaving Greenspan solely in charge of business operations.

The Nixon campaign recruited Greenspan as an advisor in 1968. In 1974, under the urging of Arthur Burns, Greenspan accepted the position of chairman of the Council of Economic Advisors. His top priority was to combat inflation and, over the course of the three years in which he served the council, inflation dropped by over four percent. When Jimmy Carter entered the presidency in 1977, Greenspan's chairmanship with the Economic Advisory ended. New York University awarded Greenspan an honorary PhD that same year. He continued to run Townsend-Greenspan until 1987.
Greenspan and the Federal Reserve (1987 to 2006)

James Baker, United States Secretary of Treasury, nominated Greenspan as Federal Reserve chairman in 1987. The Federal Reserve is a complex network of 12 Federal Reserve banks. Each bank has an administration consisting of a president, a board of directors, research personnel and bank officers. In Washington D.C., the Federal Reserve also employees a board of economic advisors. As chairman of the Federal Reserve Board, Greenspan was chief of the entire system and, because of his astute decision-making and firm leadership style, he came to be known as one of the most powerful men in the world.

Greenspan served 19 years on the Federal Reserve Board, through the Reagan, George H.W. Bush, Clinton and George W. Bush administrations. During that time, Greenspan coaxed America through one of the biggest stock market crashes in history, adjusted interest rates to successfully counter threats of inflation, gave U.S. monetary policy directives, revised lending practices with tighter regulations and helped the U.S. recover economically from the Cold War by refusing inflation on oil and supplementing U.S. cash reserves.

During his chairmanship on the Federal Reserve Board, unemployment rates dropped to a low 4.7 percent and the U.S. inflation rate dropped to below 2 percent. Additionally, the U.S. economy flourished at unprecedented rates and the federal budget came into balance under Greenspan's advisement. Greenspan had such a reputation for economic acuity that when he presented his twice-yearly assessments of the state of U.S. economic affairs before Congress, investors listened and acted accordingly. Therefore, Greenspan had the power to affect a wave of economic change with just his words.
Present Day

Shortly after leaving the Federal Reserve Board chairmanship, Greenspan penned a memoir entitled, "The Age of Turbulence." Greenspan's reputation was called into question in the financial housing crisis of 2008. As chairman of the Federal Reserve Board, he had advised against regulations that could have averted the stock market and housing bubbles that caused the 2008 crisis. He continues to speak publicly about issues the U.S. economy is facing. Greenspan is currently married to television correspondent Andrea Mitchell. They wed in April of 1997.

Linkback: https://tubagbohol.mikeligalig.com/index.php?topic=58497.0