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Alan Greenspan born in New York City in nineteen twenty six.
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He told Jim Lera in two thousand and seven that
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he was a whiz with numbers from the beginning.
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The math was a big deal. When I was very
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young and my mother used to parade me out, she
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would have me add forty five, one hundred and sixty
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two in my head, and I'm a kid, and you
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were just being kind of there, a show off the show, right.
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I was a prop for parties. Big.
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Greenspan's first career was in music, studying at Juilliard and
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playing jazz professionally. It was long, though, before he gave
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up gigwork to go back to numbers.
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The best economic position I ever made in my life
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was to decide to leave the music business and go
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into economics.
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Young economists. Green Span was soon drawn to Ein Rand,
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fierce opponent of government regulation.
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Each man must live as an end in himself and
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follow his own rational self interest.
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The author of The fountain Head and Atlas Shrugged became
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Greenspan's mentor.
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He was almost a Quaisi's sun, I would say.
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Sebastian Mallaby wrote a biography of Greenspan, the man who knew.
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His roots were in the extreme libertarian anti government circles.
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And it's remarkable therefore that he spent most of his
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career very successfully in power in politics in Washington and
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doing all the things that the libertarian Mitropore.
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Greenspan got into politics as an advisor to the nineteen
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sixty eight Richard Nixon campaign, chaired the Council of Economic
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Advisors under President Ford, was a member of President Ronald
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Reagan's Economic Policy Boardman Imson, and in nineteen eighty seven
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he became Chairman of the Federal Reserve. Chairman Greenspan will
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bring all his skill to bear by the task of
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promoting our continued economic growth while keeping inflation low. He
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went on to serve five terms under four different presidents,
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trusted by Republicans and Democrats alike.
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He just had this ability to go in to a
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room in a one on one meeting, spank a bunch
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of very obscure data, and make the other person feel
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that the only way they could understand this stuff is
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they asked for his advice.
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I'm trying to find out. Just two months after he
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became FED chair, the stock market crashed by over twenty
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two percent in one day October nineteenth, nineteen eighty seven.
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And he issued a statement saying that the FED would
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do what it took effectively to stabilize the markets, and
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that was enough to get the markets to bounce back.
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Whenever the stock market threatened to plunge again, says.
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Malaby, Greenspan seemed to pop up say something which stabilized
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everybody's nerves, you know, offer maybe to cut interest rates,
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and then that would make the markets go up again.
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Greenspan was credited with steering the FED through two recessions
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for stabilizing global markets in the late nineties. He was
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lionized and praised for intervening again after September eleventh, and
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in fact, Greenspan's reign coincided with the longest economic expansion
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in US history, prompting the title Maestro of the US economy.
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He really was in a way that I think it's
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hard to imagine today as set of technocrat hearer.
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In one widely noted speech, Greenspan worried openly about the
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stock market overheating.
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How do we know when irrational exuberance has unduly escalated
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asset values, which then becomes subject to unexpected and prolonged contractions.
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But more typically he kept markets up, though using opaque
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language to explain himself, especially when asked a question he
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didn't want to answer.
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And say, he would let his sentence sort of go
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around with multiple subclauses and it would just be incomprehensible.
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It was a tactic, and a very successful one.
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No wonder his testimony before Congress could be hard to follow.
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We at the Federal Reserve, recognizing the powerful forces of activity,
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growth and global restraint on inflation, have not perceived to
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date the need to tighten policy in response to strong
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demand beyond what has occurred through falling inflation's upward pressure
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on the real federal funds rate and the modest increase
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in the nominal rate.
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As Greenspan later told Jim Lehrer, one.
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Of the problems that surprised me when I got into
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public life was that open, clear talk is often creates problems.
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In two thousand and seven, there were serious worries about
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a financial bubble. Greenspan's response, when you get bubbles like this,
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there is no way of diffusing them until the speculative
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fever breaks on its own. Soon after came the two
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thousand and eight financial collapse, and Greenspan's reputation quickly reversed.
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He was wide criticized for having allowed the housing bubble.
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In financial bubble is a superdisruptive and to ignore them
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is a big mistake, and Greenspan made that mistake, and
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that is where I fooled him.
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But when he appeared before a House committee in two
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thousand and eight, Greenspan sort of admitted that he'd put
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too much trust in markets to self correct.
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Those of us who have looked to the self interest
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of lending institutions to protect shareholders' equity, myself especially, are
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in a state of shocked disbelief.
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For much of his tenure, Greenspan presided over a rapidly
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changing economy, one transformed by technology and globalization. But it
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was all part of a business he never tired of.
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I've been economist since the latter part of the nineteen forties,
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and that's my profession. I love it.
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Alan Greenspan has survived by his wife of twenty nine years,
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journalist Andrea Mitchell for the PBS News Hour Paul Solman.
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