Influential economist Alan Greenspan, who headed Federal Reserve for nearly two decades, dead at 100
Alan Greenspan, the influential economist who led the Federal Reserve for nearly two decades and became one of the most powerful figures in global finance, died Monday morning at the age of 100.
His wife, veteran NBC News journalist Andrea Mitchell, told CNBC that Greenspan died from complications of Parkinson’s disease. The couple, who married in 1997, had been together for nearly three decades.
Greenspan served as Fed chairman from 1987 to 2006 under four presidents — Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush.
During his tenure, he steered the US economy through a series of chaotic events including the 1987 stock market crash, the Asian financial crisis, the dot-com boom and bust and the aftermath of the Sept. 11 terrorist attacks.
Greenspan’s reputation never fully recovered from the 2008 financial crisis.
Once hailed as “the Maestro” for guiding the US economy through years of low inflation and booming markets, Greenspan became a symbol of the pre-crisis faith that Wall Street could largely police itself.
Critics argued that his Fed kept interest rates too low after the 2001 recession, helping fuel the housing bubble.
The harsher indictment focused on regulation.
The Financial Crisis Inquiry Commission later faulted the Fed for failing to use its authority to crack down on abusive mortgage lending before the subprime market exploded.
Greenspan had also championed a light-touch approach to derivatives and financial innovation that critics said left the system vulnerable when markets turned.
Called before Congress in October 2008, Greenspan acknowledged a major error in his thinking, saying he had found “a flaw” in the belief that financial institutions would adequately protect their shareholders through self-interest alone.
He told lawmakers he was in a “state of shocked disbelief” as the crisis unfolded, remarks that became the defining admission of his post-Fed career.
Greenspan never fully accepted that Federal Reserve policy was chiefly responsible for the crash.
In subsequent speeches and writings, he argued that a global flood of savings and falling long-term interest rates — not simply Fed rate decisions — had fueled housing booms around the world.
He also maintained that the securitization of risky subprime mortgages played a more direct role in the meltdown than monetary policy.
Known for his often-cryptic public remarks, Greenspan became a Wall Street celebrity during the 1990s economic expansion and earned the nickname “the Maestro.”
His 1996 warning about “irrational exuberance” became one of the most famous phrases in modern economic history.
In later years, Greenspan faced criticism from some economists who argued that policies pursued during his tenure helped lay the groundwork for the 2008 financial crisis.
“Alan Greenspan was a brilliant and creative thinker, steadfast in character, and a wonderful human being who I’ve known for more than 40 years,” said JPMorgan CEO Jamie Dimon, calling him “an exemplary Chair of the Federal Reserve.”
Derek Reisfield, co-founder and former chairman of MarketWatch, told The Post that Greenspan “will go down in history as one of the better Fed Chairs.”
“Overall the US economy did very well during his tenure.”
Reisfield pointed to Greenspan’s response to the October 1987 stock market crash, which struck just weeks after he became Fed chairman.
“You have to remember Greenspan took office two months before ‘Black Monday,’ October 19, 1987,” Reisfield said.
“The Dow Jones Index dropped over 22% in one day. It was the largest single daily drop in history. People were in shock, and were walking around like zombies on Wall Street,” Reisfeld said.
“He led the effort to cut interest rates and inject liquidity into the financial system. He also helped to ensure the markets remained open, which was a key factor in the quick recovery.”