Alan Greenspan, the former Federal Reserve Board chairman who presided over a long period of economic stability and prosperity and was accorded rock-star status in the financial world only to have his reputation tarnished in the wrenching recession and global credit crisis in 2008, has died at the age of 100. <\/p>\n
A towering figure in American finance who influenced a generation of central bankers worldwide, Greenspan died Monday from complications of Parkinson\u2019s disease, according to his wife, Andrea Mitchell.<\/p>\n
\u201cTo me he was my husband, who shaped my life from our very first date in 1984,\u201d Mitchell said in a statement reported by NBC News,<\/a> where she serves as the network\u2019s chief Washington correspondent. \u201cHe had \u2018irrational exuberance\u2019 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.\u201d<\/p>\n Greenspan headed the Fed from 1987 to 2006, a span in which the U.S. 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<\/a>; the rise of the Internet age; and the dissolution of the Soviet Union that began in the late 1980s.<\/p>\n After Greenspan\u2019s 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 U.S. since the Great Depression.<\/p>\n He defended himself vigorously in writing and in interviews, telling CNBC in April 2008 that he had \u201cno regrets\u201d about his policies.<\/p>\n But in October 2008, at the height of the global economic turmoil fueled by America\u2019s home mortgage meltdown, Greenspan appeared on Capitol Hill<\/a> 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 \u201cshocked disbelief\u201d at the breakdown of the credit markets, which he called a \u201conce-in-a-century credit tsunami.\u201d<\/p>\n He conceded that he was wrong in assuming that free-market forces would prevent such a crisis.<\/p>\n \u201cThere was just this view that financial markets were going to regulate themselves,\u201d said Gary Richardson, a UC Irvine economics professor who was the Fed\u2019s official historian from 2012 to 2016. \u201cHe got in the driver\u2019s seat when the deregulation trend was incipient. He was a champion of deregulating the financial industry.\u201d<\/p>\n Richardson noted that under Greenspan, the Fed\u2019s gravitas and influence in the world soared and the U.S. economy would achieve what then was a record 10 straight years<\/a> of uninterrupted growth.<\/p>\n \u201cHis decisions helped to promote this period of global prosperity and stability,\u201d he said. <\/p>\n During Greenspan\u2019s watch under four U.S. 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 U.S. 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. <\/p>\n The dour and bespectacled New Yorker helped unravel the central bank\u2019s mystique. The Fed for the first time began releasing public statements describing the actions of its monetary policy-setting Federal Open Market Committee. Investors previously would have to guess the Fed\u2019s posture toward interest rates by watching for changes in the Treasury bond market.<\/p>\n His immediate successor, Ben S. Bernanke, would significantly expand<\/a> what Greenspan had begun, increasing the flow of information to the public and markets by holding regular news conferences and providing more guidance on the Fed\u2019s thinking on policies and the economy. <\/p>\n The tradition was carried on by Bernanke\u2019s successors, Janet Yellen and Jerome Powell, who recently ended his second term after a series of clashes with the Trump administration over his refusal to lower interest rates. He was succeeded last month by Kevin Warsh<\/a>.<\/p>\n The move toward greater Fed transparency, which was followed by central bankers around the globe, didn\u2019t mean Greenspan\u2019s statements weren\u2019t without mystery. <\/p>\n During regular testimony in Congress \u2014 the main forum for Fed chiefs to discuss their policies \u2014 Greenspan perfected a nearly impenetrable mode of communication that came to be known as \u201cFedspeak,\u201d or \u201cGreenspeak.\u201d<\/p>\n \u201cSince I\u2019ve become a central banker, I\u2019ve learned to mumble with great incoherence,\u201d Greenspan once told a panel on Capitol Hill, adding: \u201cIf I seem unduly clear to you, you must have misunderstood what I said.\u201d<\/p>\n 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.<\/p>\n Having built a lucrative economic forecasting business before entering public life, Greenspan had a practical grasp of the workings of industrial America that deeply influenced his thinking at the Fed, which wields its influence mostly by setting short-term interest rates \u2014 raising them to slow the economy and squelch inflation or lowering them to stimulate investment and growth. He was known to enjoy pondering economic minutiae while taking lengthy baths to relieve back problems.<\/p>\n \u201cThe guy just had an incredible feel for the data,\u201d said Columbia University economist Frederic S. Mishkin, who worked as an advisor under Greenspan.<\/p>\n In one of his greatest insights, Greenspan came early to realize that the worker productivity boom fueled by the rise of the internet had profound inflation-dampening side effects. Thus, he dared to break with long-held dogma that the economy would overheat and spark runaway inflation if allowed to grow at a sustained rate of much above 2.5% per year. In the late 1990s, Greenspan\u2019s Fed kept its foot off the brakes as economic growth cranked up to an annual clip of more than 4% for several years.<\/p>\n The gamble worked: Not only did inflation stay low, but wages rose and the jobless rate in 2000 sank below 4% for the first time in 30 years. According to supporters, Greenspan\u2019s theories about full employment, rising incomes and only moderate inflation helped make life better for millions of Americans who hadn\u2019t fully shared in previous bursts of economic prosperity.<\/p>\n Greenspan\u2019s first serious challenge, the Black Monday crash of Oct. 19, 1987, came just two months after he\u2019d taken over the Fed chairmanship from Volcker. After the Dow Jones industrial average fell 23%, Greenspan assured a badly rattled Wall Street that \u201cthe Fed stands ready to provide all necessary liquidity.\u201d That calming pronouncement, backed by an infusion of cash into the economy, was credited with limiting damage from the crash and helping set the stage for the roaring bull market of the 1990s.<\/p>\n Detractors, though, faulted Greenspan for playing politics, particularly in his public endorsement of the sweeping tax cuts that President George W. Bush, a fellow Republican, put through in his first term. But Greenspan\u2019s policies could cut both ways. Bush\u2019s father, President George H.W. Bush, partly blamed high interest rates imposed by Greenspan\u2019s Fed for his 1992 reelection loss to Bill Clinton.<\/p>\n Contemporary views of Greenspan remain largely positive. Popular with Congress and the White House, he was appointed to a record five four-year terms, first by President Reagan in 1987 and later by the senior Bush, Clinton and George W. Bush. He retired from the Fed in early 2006, giving way to the academic economist Bernanke. <\/p>\n By that time, the Fed\u2019s dominance in worldwide financial affairs was on the wane because of the globalization of financial markets, the increasing influence of Europe after its mid-1990s economic unification and the rise of China and India to the status of economic superpowers.<\/p>\n