TRANSKRIP 🔗
WEBVTT
1
00:00:00.160 --> 00:00:03.560
Alan Greenspan born in New York City in nineteen twenty six.
2
00:00:04.280 --> 00:00:06.960
He told Jim Lera in two thousand and seven that
3
00:00:07.000 --> 00:00:09.279
he was a whiz with numbers from the beginning.
4
00:00:09.640 --> 00:00:11.439
The math was a big deal. When I was very
5
00:00:11.480 --> 00:00:13.640
young and my mother used to parade me out, she
6
00:00:13.679 --> 00:00:16.600
would have me add forty five, one hundred and sixty
7
00:00:16.600 --> 00:00:20.280
two in my head, and I'm a kid, and you
8
00:00:20.320 --> 00:00:22.440
were just being kind of there, a show off the show, right.
9
00:00:22.679 --> 00:00:25.960
I was a prop for parties. Big.
10
00:00:25.960 --> 00:00:29.879
Greenspan's first career was in music, studying at Juilliard and
11
00:00:29.920 --> 00:00:33.880
playing jazz professionally. It was long, though, before he gave
12
00:00:34.000 --> 00:00:36.039
up gigwork to go back to numbers.
13
00:00:36.439 --> 00:00:38.799
The best economic position I ever made in my life
14
00:00:39.159 --> 00:00:40.920
was to decide to leave the music business and go
15
00:00:41.039 --> 00:00:41.880
into economics.
16
00:00:42.280 --> 00:00:45.359
Young economists. Green Span was soon drawn to Ein Rand,
17
00:00:45.759 --> 00:00:47.880
fierce opponent of government regulation.
18
00:00:48.479 --> 00:00:52.000
Each man must live as an end in himself and
19
00:00:52.079 --> 00:00:54.960
follow his own rational self interest.
20
00:00:55.439 --> 00:00:57.960
The author of The fountain Head and Atlas Shrugged became
21
00:00:58.079 --> 00:00:59.200
Greenspan's mentor.
22
00:00:59.479 --> 00:01:03.159
He was almost a Quaisi's sun, I would say.
23
00:01:03.560 --> 00:01:07.959
Sebastian Mallaby wrote a biography of Greenspan, the man who knew.
24
00:01:08.000 --> 00:01:13.719
His roots were in the extreme libertarian anti government circles.
25
00:01:14.000 --> 00:01:16.560
And it's remarkable therefore that he spent most of his
26
00:01:16.640 --> 00:01:21.040
career very successfully in power in politics in Washington and
27
00:01:21.120 --> 00:01:23.319
doing all the things that the libertarian Mitropore.
28
00:01:23.799 --> 00:01:27.040
Greenspan got into politics as an advisor to the nineteen
29
00:01:27.120 --> 00:01:31.079
sixty eight Richard Nixon campaign, chaired the Council of Economic
30
00:01:31.120 --> 00:01:34.879
Advisors under President Ford, was a member of President Ronald
31
00:01:34.920 --> 00:01:41.319
Reagan's Economic Policy Boardman Imson, and in nineteen eighty seven
32
00:01:41.359 --> 00:01:45.120
he became Chairman of the Federal Reserve. Chairman Greenspan will
33
00:01:45.120 --> 00:01:47.439
bring all his skill to bear by the task of
34
00:01:47.439 --> 00:01:51.959
promoting our continued economic growth while keeping inflation low. He
35
00:01:52.040 --> 00:01:55.480
went on to serve five terms under four different presidents,
36
00:01:55.680 --> 00:01:58.200
trusted by Republicans and Democrats alike.
37
00:01:58.439 --> 00:02:00.280
He just had this ability to go in to a
38
00:02:00.359 --> 00:02:03.519
room in a one on one meeting, spank a bunch
39
00:02:03.560 --> 00:02:06.640
of very obscure data, and make the other person feel
40
00:02:06.680 --> 00:02:09.360
that the only way they could understand this stuff is
41
00:02:09.400 --> 00:02:10.639
they asked for his advice.
42
00:02:11.479 --> 00:02:14.599
I'm trying to find out. Just two months after he
43
00:02:14.639 --> 00:02:18.400
became FED chair, the stock market crashed by over twenty
44
00:02:18.479 --> 00:02:23.039
two percent in one day October nineteenth, nineteen eighty seven.
45
00:02:23.000 --> 00:02:25.159
And he issued a statement saying that the FED would
46
00:02:25.159 --> 00:02:29.199
do what it took effectively to stabilize the markets, and
47
00:02:29.280 --> 00:02:31.960
that was enough to get the markets to bounce back.
48
00:02:32.120 --> 00:02:34.919
Whenever the stock market threatened to plunge again, says.
49
00:02:34.680 --> 00:02:39.240
Malaby, Greenspan seemed to pop up say something which stabilized
50
00:02:39.280 --> 00:02:43.479
everybody's nerves, you know, offer maybe to cut interest rates,
51
00:02:44.000 --> 00:02:46.000
and then that would make the markets go up again.
52
00:02:46.199 --> 00:02:50.240
Greenspan was credited with steering the FED through two recessions
53
00:02:50.280 --> 00:02:53.759
for stabilizing global markets in the late nineties. He was
54
00:02:53.879 --> 00:02:58.520
lionized and praised for intervening again after September eleventh, and
55
00:02:58.560 --> 00:03:02.840
in fact, Greenspan's reign coincided with the longest economic expansion
56
00:03:03.199 --> 00:03:08.280
in US history, prompting the title Maestro of the US economy.
57
00:03:08.680 --> 00:03:10.919
He really was in a way that I think it's
58
00:03:10.919 --> 00:03:14.000
hard to imagine today as set of technocrat hearer.
59
00:03:14.719 --> 00:03:18.960
In one widely noted speech, Greenspan worried openly about the
60
00:03:19.000 --> 00:03:20.479
stock market overheating.
61
00:03:20.960 --> 00:03:26.280
How do we know when irrational exuberance has unduly escalated
62
00:03:26.360 --> 00:03:33.199
asset values, which then becomes subject to unexpected and prolonged contractions.
63
00:03:33.599 --> 00:03:37.360
But more typically he kept markets up, though using opaque
64
00:03:37.439 --> 00:03:40.560
language to explain himself, especially when asked a question he
65
00:03:40.599 --> 00:03:41.800
didn't want to answer.
66
00:03:41.719 --> 00:03:44.520
And say, he would let his sentence sort of go
67
00:03:44.680 --> 00:03:49.039
around with multiple subclauses and it would just be incomprehensible.
68
00:03:49.879 --> 00:03:51.960
It was a tactic, and a very successful one.
69
00:03:52.199 --> 00:03:55.879
No wonder his testimony before Congress could be hard to follow.
70
00:03:56.159 --> 00:04:00.360
We at the Federal Reserve, recognizing the powerful forces of activity,
71
00:04:00.439 --> 00:04:05.759
growth and global restraint on inflation, have not perceived to
72
00:04:05.879 --> 00:04:09.840
date the need to tighten policy in response to strong
73
00:04:09.919 --> 00:04:16.560
demand beyond what has occurred through falling inflation's upward pressure
74
00:04:17.160 --> 00:04:21.199
on the real federal funds rate and the modest increase
75
00:04:21.240 --> 00:04:22.360
in the nominal rate.
76
00:04:22.800 --> 00:04:25.439
As Greenspan later told Jim Lehrer, one.
77
00:04:25.319 --> 00:04:28.040
Of the problems that surprised me when I got into
78
00:04:28.040 --> 00:04:36.480
public life was that open, clear talk is often creates problems.
79
00:04:36.959 --> 00:04:39.759
In two thousand and seven, there were serious worries about
80
00:04:39.759 --> 00:04:44.839
a financial bubble. Greenspan's response, when you get bubbles like this,
81
00:04:45.720 --> 00:04:50.439
there is no way of diffusing them until the speculative
82
00:04:50.480 --> 00:04:54.000
fever breaks on its own. Soon after came the two
83
00:04:54.040 --> 00:04:58.839
thousand and eight financial collapse, and Greenspan's reputation quickly reversed.
84
00:04:59.360 --> 00:05:02.600
He was wide criticized for having allowed the housing bubble.
85
00:05:02.920 --> 00:05:07.000
In financial bubble is a superdisruptive and to ignore them
86
00:05:07.240 --> 00:05:10.279
is a big mistake, and Greenspan made that mistake, and
87
00:05:10.319 --> 00:05:11.439
that is where I fooled him.
88
00:05:12.040 --> 00:05:14.360
But when he appeared before a House committee in two
89
00:05:14.399 --> 00:05:17.920
thousand and eight, Greenspan sort of admitted that he'd put
90
00:05:18.000 --> 00:05:20.519
too much trust in markets to self correct.
91
00:05:21.199 --> 00:05:23.480
Those of us who have looked to the self interest
92
00:05:23.519 --> 00:05:30.120
of lending institutions to protect shareholders' equity, myself especially, are
93
00:05:30.160 --> 00:05:32.439
in a state of shocked disbelief.
94
00:05:33.000 --> 00:05:36.279
For much of his tenure, Greenspan presided over a rapidly
95
00:05:36.399 --> 00:05:41.639
changing economy, one transformed by technology and globalization. But it
96
00:05:41.680 --> 00:05:43.920
was all part of a business he never tired of.
97
00:05:44.279 --> 00:05:49.240
I've been economist since the latter part of the nineteen forties,
98
00:05:50.480 --> 00:05:52.399
and that's my profession. I love it.
99
00:05:52.839 --> 00:05:56.079
Alan Greenspan has survived by his wife of twenty nine years,
100
00:05:56.199 --> 00:05:59.959
journalist Andrea Mitchell for the PBS News Hour Paul Solman.
101
00:06:04.319 --> 00:06:09.560
Support journalism you trust. Support PBS News Donate now, or
102
00:06:09.600 --> 00:06:33.160
even better, start a monthly contribution Today