Alan Greenspan: Brief Bio, Policies, Legacy

Key takeaways
* Alan Greenspan is an American economist who served as Chair of the Federal Reserve from 1987 to 2006.
* His tenure coincided with the Great Moderation—an extended period of relatively stable inflation and growth—and is credited by supporters for the economic stability of the 1990s.
* Critics argue his low-interest policies and the so-called “Greenspan put” helped fuel asset bubbles, including the dot‑com and housing bubbles, and contributed to the 2007–2009 financial crisis.
* Views of his legacy remain divided: praised for crisis management and blamed for encouraging excessive risk-taking.

Who he is

Alan Greenspan (born March 6, 1926) is an economist best known for serving as Chair of the Board of Governors of the Federal Reserve and chair of the Federal Open Market Committee (FOMC). Appointed by President Ronald Reagan, Greenspan led the Fed through five terms from 1987 until 2006.

Early life and career

• Education: bachelor’s, master’s, and doctoral degrees in economics from New York University; additional study at Columbia University.
• Early career: worked in economic research and ran the consulting firm Townsend-Greenspan & Co. (1954–1974; 1977–1987).
• Public service: chaired the President’s Council of Economic Advisers under President Gerald Ford before joining the Fed.
• After the Fed: published a memoir, The Age of Turbulence, and founded Greenspan Associates LLC, a Washington-based advisory firm.
• Honors: awarded the Presidential Medal of Freedom.

Federal Reserve tenure (1987–2006)

Greenspan’s long tenure spanned major events and policy shifts:
* 1987 stock market crash: led early Fed responses, including rapid rate cuts to stabilize markets.
* Great Moderation: presided over a period of relatively low, stable inflation and steady growth in the 1990s.
* Crisis responses: directed monetary policy actions after the dot-com bust and the September 11 attacks.

Major policies and controversies

Views on inflation and monetary stance
* Early career: known for concern about inflation and for advocating a gold-standard-related perspective in the 1960s.
* As Fed chair: adopted a more flexible stance—willing to tolerate lower rates to avoid severe economic downturns—leading to extended periods of easy money relative to his predecessor.

Interest-rate decisions
* Greenspan led significant interest-rate reductions in 2000 (after the dot‑com bust) and in 2001 (after 9/11), bringing the federal funds rate to historically low levels during the early 2000s.
* Critics contend these low rates helped inflate asset prices, including the housing market, contributing to the subsequent subprime mortgage crisis.

Adjustable-rate mortgages (ARMs)
* In 2004 Greenspan publicly suggested ARMs could be appropriate for some homeowners. When rates later rose, many adjustable mortgages reset to much higher payments, worsening homeowner distress during the housing downturn.

The “Greenspan put” and moral hazard
* The term “Greenspan put” describes market expectations that the Fed would lower rates aggressively to limit losses during downturns.
* This perceived safety net is argued to have created moral hazard—encouraging investors to take on greater risk with the expectation of Fed intervention.

Legacy and assessment

Greenspan’s record is judged differently by different observers:
* Supporters: credit him with helping produce a long period of macroeconomic stability, skillfully managing crises, and maintaining low inflation.
* Critics: blame certain policy choices—especially prolonged low rates and perceived backstopping of markets—for encouraging excessive risk-taking and contributing to asset bubbles that fed the 2007–2009 financial crisis.

Personal and current activities

• Born: March 6, 1926.
• Spouse: married to journalist Andrea Mitchell.
• Post-Fed work: advisory services through Greenspan Associates LLC and public commentary; author of a memoir.

Bottom line

Alan Greenspan is a consequential and controversial figure in modern U.S. economic history. His leadership at the Fed is associated with both notable periods of stability and policy choices that many argue helped set the stage for later crises. Evaluations of his impact vary with the relative weight observers place on short‑term crisis management versus longer‑term incentives and market outcomes.