Alan Greenspan, longtime head of Federal Reserve, dies | Newsline

“To me he was my husband, who shaped my life from our very first date in 1984,” Mitchell said in a statement reported by NBC News where she serves as the network’s chief Washington correspondent. “He had ‘irrational exuberance’ for baseball, the Washington Commanders, tennis, golf, and music, especially jazz. He will be remembered for his brilliance and his kindness. Being his life partner was the joy of my life.”

Greenspan headed the Fed from 1987 to 2006, a span in which the US economy enjoyed relatively steady growth and low inflation. Though he received much of the credit, Greenspan benefited from the tough, inflation-breaking policies of his immediate predecessor, Paul A. Volcker; the rise of the Internet age; and the dissolution of the Soviet Union that began in the late 1980s.

After Greenspan’s retirement, his performance was reassessed more harshly in light of the turmoil that began to emerge the following year in financial and real estate markets. Critics blamed Fed hubris and its easy-money policies and especially light-handed regulation of banks for helping to create conditions that led to the Great Recession, the longest economic contraction in the US since the Great Depression.

He defended himself vigorously in writing and in interviews, telling CNBC in April 2008 that he had “no regrets” about his policies.

But in October 2008 at the height of the global economic turmoil fueled by America’s home mortgage meltdown, Greenspan appeared on Capitol Hill to a reception entirely different from the adulation he received while chairman. The grim-faced Greenspan could offer only a limited defense of his economic policies and said he was in a state of “shocked disbelief” at the breakdown of the credit markets, which he called a “once-in-a-century credit tsunami.”

He conceded that he was wrong in assuming that free-market forces would prevent such a crisis.

“There was just this view that financial markets were going to regulate themselves,” said Gary Richardson, a UC Irvine economics professor who was the Fed’s official historian from 2012 to 2016. “He got in the driver’s seat when the deregulation trend was incipient. He was a champion of deregulating the financial industry.”

At the same time, Richardson noted that under Greenspan, the Fed’s gravitas and influence in the world had reached unparalleled heights. And during his helm at the central bank, the US economy would achieve what then was a record 10 straight years of uninterrupted growth.

“His decisions helped to promote this period of global prosperity and stability,” he said.

During Greenspan’s watch under four US presidents, the Fed coped successfully with emergencies such as the stock market crash of 1987, financial crises in Mexico and Asia in the 1990s, the collapse in 1998 of giant US hedge fund Long-Term Capital Management, the bursting of the dot-com stock bubble beginning in 2000, and the economic fallout from the Sept. 11 terrorist attacks in 2001.

One of Greenspan’s most enduring legacies at the Fed was the way in which the dour and bespectacled New Yorker helped unravel the central bank’s mystique. During his tenure, the Fed for the first time began releasing public statements describing the actions of its monetary policy-setting Federal Open Market Committee. It was a sea change as investors previously would have to guess the Fed’s posture toward interest rates by watching for changes in the Treasury bond market.

His immediate successor, Ben S. Bernanke, would significantly expand what Greenspan had begun, increasing the flow of information to the public and markets by holding regular news conferences and providing more guidance on Fed’s thinking on policies and the economy.

The move toward greater Fed transparency, which was followed by central bankers around the globe, didn’t mean Greenspan’s statements weren’t without mystery. During regular testimony in Congress — the main forum for Fed chiefs to discuss their policies — Greenspan perfected a nearly impenetrable mode of communication that came to be known as “Fedspeak,” or “Greenspeak.”

“Since I’ve become a central banker, I’ve learned to mumble with great incoherence,” Greenspan once told a panel on Capitol Hill, adding: “If I seem unduly clear to you, you must have misunderstood what I said.”

In an interview after leaving office, Greenspan admitted that he had been deliberately cryptic in his public statements in order to discourage market players from trading on his remarks. Such efforts notwithstanding, he could not keep investors from hanging on his every word for a clue as to the direction of interest rates.