Title: Maestro: One-Time Jazz Musician Alan Greenspan Has Conducted the Economic Orchestra with a Combination of Facts and Intuition, Producing a Melody of Stability and Prosperity
Abstract: On Jan. 31, 2006, Greenspan will step down as chairman of the Federal Reserve after more than 18 years on the job. It would be an understatement to say that America has prospered under his leadership. Indeed, Greenspan leaves behind a brilliant legacy as probably the greatest Fed chairman ever. His predecessor--Paul Volcker, who rescued the nation from crippling inflation in the 1980s--deserves mention as well. But under Greenspan, the United States has enjoyed one of the longest periods of economic growth and price stability in its history. Only two relatively short recessions occurred on his watch--and the second one, in 2001, was so brief that it was over practically before it began. Alan Greenspan, without doubt, is the best and most successful Federal Reserve chairman in history, says Richard Kovacevich, chairman and chief executive officer at Wells Fargo & Co. For nearly two decades, our country has enjoyed solid economic growth, unprecedented prosperity, low inflation and low unemployment. No other single individual deserves more credit for this result than Chairman Greenspan. But has Greenspan been too successful as the country's top inflation cop? Some macroeconomists say that monetary policy has become personalized in the body of the 79-year-old chairman, and that the Fed's policy decisions have been driven more by his judgment than by a set of rules and economic models that can be followed and applied by his successor. And on Feb. 1, 2006 some other novitiate will become chairman of the Federal Reserve, and the market will hold its collective breath. Giving all the credit to Greenspan tends to marginalize the contributions of the Fed's policy making body--the Federal Open Market Committee, which has 11 other members aside from the chairman--and to overlook the competency of the Fed's vaunted research staff. And yet there's no question that Greenspan's successor and the FOMC will be under extremely close scrutiny to see whether they will keep inflation at bay once Greenspan has left. The financial markets will be watching closely to see whether the work that Volcker started and Greenspan sustained will falter under a new chairman. Economist for hire The Greenspan that most Americans see is the owlish central banker who appears twice a year before Congress and mumbles through his often arcane testimony on the state of the U.S. economy--talking much but revealing relatively little. As his own legend has grown in recent years, it has become increasingly difficult to separate Greenspan the man from Greenspan the economic shaman--a phenomenon that has been well fertilized by the chairman's own enigmatic tendencies. Whether by nature or through certain knowledge that his pronouncements are intensely scrutinized, Greenspan has been a public figure who seems to haunt the shadows. To be sure, he has often opined on the value of tax cuts, the dangers of deficits and the irrational exuberance of investors. But most Americans--including most bankers--probably know very little about the man or how he works. Even now, it would probably come as a surprise to most people to discover that Greenspan's first real job was as a jazz musician in the 1940s. Born and raised in Manhattan, Greenspan's first love was music and he studied at the Juilliard School--majoring in the clarinet--after graduating from high school. He later dropped out of Juilliard and spent a couple of years as a regular member of a swing band--Henry Jerome and His Orchestra--where he played the clarinet and tenor saxophone. Greenspan eventually quit the band and enrolled at the New York University School of Commerce, graduating in 1948 with a bachelor-of-science degree in economics. He followed that a few years later with a master's in economics from NYU. His first job, in what soon become his real life's work, was as an economist for the National Industrial Conference Board, known today as the Conference Board. …
Publication Year: 2005
Publication Date: 2005-11-01
Language: en
Type: article
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