The Federal Reserve is the equivalent of the first bank in the United States, and its function is to monitor economic growth and prevent it from developing too fast to cause inflation or too slow to cause recession. The Fed controls the amount of money in circulation, regulates the amount of savings and interest rates in banks, and adjusts interest rates to control the pace of economic development. The Fed chair is appointed by **, but the Fed itself is an independent body that is neither under the orders of ** nor bound by Congress. From 1987 to 2006, Alan Greenspan served as chairman of the Federal Reserve for five consecutive terms, including Reagan, George H.W. Bush, Bill Clinton, and George W. Bush. In this pivotal position, Greenspan guided the U.S. economy through the crisis of the late 80s of the 20th century, the boom of the 90s, the bursting of the new economic bubble at the beginning of the 21st century, and the trough after 9/11 with his excellent economic acumen and keen political sense.
Alan Greenspan was born in New York on March 6, 1926, to Jewish immigrants from Germany and Poland, respectively. When he was 5 years old, his father and mother, who were the brokers, divorced, and his mother took Greenspan back to his parents' house and lived with his grandparents in a one-bedroom apartment. From an early age, Greenspan showed a talent for mathematics and **. After graduating from high school, he was admitted to the prestigious Juilla** College, where he majored in clarinet playing. But soon he dropped out of school and toured the eastern United States with a whirling band. A year later, Greenspan decided to give up his career and go back to school to study Xi economics.
In 1948, he graduated magna laude from New York University's Department of Economics, and two years later received his master's degree. In 1950, Greenspan transferred to Columbia University to pursue a Ph.D. under the famous economist Arthur Burns, who later became chairman of the Federal Reserve, but he dropped out of school before he could get his Ph.D. After leaving Columbia, Greenspan co-founded Thomson-Greenspan Consulting, a 27-year-old veteran investment broker, with William Townsend, a 65-year-old veteran investment broker, to provide market analysis and economics to industrial and commercial clients. In 1958, Townsend died of a heart attack, and Greenspan took over as president of the company.
Despite its small size, his firm has a high reputation, and its clients include some of the best corporate and banking companies in the United States. Years later, Greenspan was a millionaire.
In the early '50s, Greenspan married the artist Joan Michelle, but the marriage was annulled ten months after the marriage.
Through Joan, Greenspan became acquainted with the famous writer and philosopher Ian Rand, who was born in **, and whose objectivist theories had an extremely profound influence on him. Greenspan agrees with Rand's point of view, advocates a free market economy, and opposes the interference and restraint of enterprises. This became Greenspan's dominant idea for regulating the U.S. economy for decades to come.
In 1968, Alan Greenspan made his first foray into politics to advise Nixon's campaign. After Nixon entered the White House, he strongly invited him to hold an important position, but he politely declined. In 1974, Nixon nominated Alan Greenspan as chairman of the Council of Economic Advisers before the Watergate scandal**, and Ford took over** making the official appointment. After several prevarications, Greenspan gave up the consulting firm's annual income of 300,000 yuan to become a *** with an annual salary of 40,000 yuan, and in the following years, he reduced the inflation rate from 11 to 65. Put the U.S. economy on the right track. In 1976, Ford lost his re-election bid, and Greenspan left his job to return to his consulting firm. When Reagan took office in 1980, he appointed Greenspan as chairman of the newly created Social Security System Reform Committee. In 1983, his reform bill passed Congress, and Greenspan was once again successful.
On June 2, 1987, Reagan** announced the nomination of Alan Greenspan as chairman of the Federal Reserve, and the return to calm after a brief period of volatility at home and abroad showed investors' approval of the appointment. On August 11, Greenspan was officially sworn in. But just two months after he took office, a catastrophic ** collapse broke out in the United States. On October 19, the Dow Jones plunged 508 points in a single day, known as "Black Monday".
Greenspan made a decisive decision, immediately announcing that the Federal Reserve would ensure sufficient cash flow and force banks to continue to lend money. With the Fed backing them, investors' panic quickly eased, and the Dow Jones recovered more than 100 points the next day,** calming down two weeks later, thus averting the worst financial crisis in history.
Greenspan's calm and resolute and decisive efforts to turn the tide have won him praise on "Wall Street" and other awards.
Greenspan's main goal was to control inflation, and his approach was to make frequent and low adjustments to interest rates based on the state of the economy. In the late '80s, he raised interest rates for two years in a row, followed by a slight reduction during the Gulf War and during the recession of the early '90s.
In 1994, he raised interest rates six times to slow the pace of economic development and avoid inflation. However, between 1998 and 1999, Greenspan changed his conservative and cautious style, raising interest rates only once symbolically in the face of soaring and strong economies. Looking back at the 90s, Greenspan left the United States with one of the most prosperous economic years, as evidenced by low unemployment, zero inflation, a strong dollar, and unprecedented wealth growth. Not only that, but he also helped Clinton reduce the fiscal deficit, which led to lower long-term interest rates, which led to an increase in new loans, a boom in consumption, and a larger job market. When Clinton left office, he had not only paid off all his debts but also had a surplus of several billions.
2001 was Greenspan's toughest year as Fed chairman. First, the bursting of the new economic bubble continued, followed by the 9/11 terrorist attacks that caused even greater panic among investors. This year, Greenspan changed the interest rate from 65 all the way down to 175. It is hoped that economic development will be stimulated.
In 2002, when the U.S. invasion of Iraq and corporate scandals worsened the recessionary economy, Greenspan lowered interest rates to 125 all-time lows, with the conviction that the growth of productivity will drive the expansion and recovery of the economy.
In 2004, the economy began to pick up as he expected, and he began to gradually raise interest rates. In June of the same year, Bush** reappointed him as chairman of the Federal Reserve, which was unanimously approved by the Senate.
Greenspan was rarely criticized during his tenure as Fed chairman, on the one hand, because there are many factors that determine economic development, the most critical of which are tax policy and debt management, which are not within the Fed's purview, and on the other hand, Greenspan's own economic ability and professional ethics have won him the respect of his peers.
In 1996, Fortune magazine conducted a survey of 1,000 CEOs of top U.S. business companies, and the results showed that Greenspan had a 96 percent approval rating. Not only that, but Greenspan has also been unanimously endorsed by Republicans and Democrats. Despite their different political philosophies, Clinton twice nominated Republican Alan Greenspan as chairman of the Federal Reserve during his tenure, and the latter went all out to help the former create an unprecedented economic boom.
In every inauguration oath, Greenspan stressed that he would be conscientious, always based on the economy, and that all decisions would be made from an economic position rather than political considerations, and he did do so independently, objectively, and realistically. As Fortune noted: "Greenspan has consistently presided over the Fed on non-political principles, better than all of his predecessors." But Greenspan is not ignorant of politics. On the contrary, he has an extremely keen political sense and is well aware of partisan disputes, so he is able to move between Democrats and Republicans without sviving from his stated goals.
Greenspan knew that he was in an important position to affect the whole body, so he was extremely cautious in his speech, and he never showed joy and sorrow, and practiced the ability to speak ambiguously and vaguely, so as not to be misunderstood and lead to unexpected consequences.
Greenspan was seen as a scholarly genius economist. He is erudite, wise, rigorous, introverted, and even a little arrogant. Despite his modest appearance, his wisdom has captivated many women.
On April 6, 1997, Greenspan married NBC news anchor Anria Michel.
Alan Greenspan stepped down in January 2006. Many people blamed the subprime mortgage crisis that broke out soon after on his overly loose monetary policy, and many Democratic lawmakers criticized him for clearly showing his personal political ideas on tax cuts and other aspects. Greenspan, who has been praised for many years, has become a controversial figure since leaving office.