Alan Greenspan Permanent head of the US Federal Reserve System (FRS) since 1987 Date of Birth: 06.03.1926 Country: USA

Biography of Alan Greenspan

Alan Greenspan, the long-serving chairman of the Federal Reserve System (FRS) of the United States, announced his retirement on January 31, 2006, after holding the position since 1987. Known as the "best chairman of the FRS of the 20th century," Greenspan voluntarily left his post at the age of 79 and prepared to enter retirement. He served under four presidents, both Democrats and Republicans, and his trustworthiness was so high that even the current President of the United States, George W. Bush, said that he would immediately contact Alan Greenspan in the event of an emergency.

Born on March 6, 1926, in Brooklyn, Alan Greenspan grew up in a family of German immigrants. His father was a stockbroker, but after his parents divorced when Alan was five years old, he saw his father only occasionally. His mother, Rose, moved with him to New York and they lived in a small two-bedroom apartment on Broadway and 163rd Street. Despite his father's influence as a successful professional, Alan spent most of his time with his mother, her parents, and his cousins. Their main interests were music, with his grandfather singing in the synagogue choir and his mother enjoying singing and playing the piano. Alan started playing the clarinet in the school orchestra and later took lessons from a famous music teacher in New York, Bill Shiner. Additionally, Alan had a remarkable talent for mental calculations from a young age. While other children were asked to recite poems, he was asked to solve mathematical problems. He also became a passionate baseball player in school.

After graduating from George Washington High School in 1943, his yearbook described him as "very intelligent and talented. Will play the saxophone and clarinet for you." However, it took him another year to decide on his future career. He toured with Henry Jerome's orchestra as a professional musician, playing the saxophone and clarinet. However, he soon realized that the artistic life was not for him. At the age of 18, he enrolled in the School of Commerce at New York University. Despite pursuing a career in economics, music still had a significant influence on Greenspan's life. It was during this time that he played in the same ensemble as Leonard Garment, who later became a key advisor to President Richard Nixon and introduced Greenspan to his first "political" job in the future president's team. In 1948, Greenspan earned a bachelor's degree, followed by a master's degree in economics two years later. In 1952, he married artist Joan Mitchell, but their marriage ended within a year. However, Joan introduced him to her friend and philosopher Ayn Rand, who had a significant impact on Greenspan's life and shared views on the efficiency of the market as a universal regulator in all aspects of life, including social security and national issues. Their friendship lasted until Rand's death in 1982.

In 1954, Greenspan co-founded the consulting firm "Townsend-Greenspan" with securities specialist William Townsend. The company opened an office on Wall Street and gained a successful clientele. In 1958, after Townsend's death, Alan became the president and primary owner of the company. During this time, Greenspan met Arthur Burns, who was the chairman of the Federal Reserve in the 1970s. Burns drew Greenspan's attention to the regulation of the financial system by the government. In 1974, Leonard Garment, Greenspan's former bandmate, invited him to become an economic advisor to President Nixon. Although Greenspan held the position for only a month before Nixon's resignation, his career as a financial guru had taken a new direction. He continued as an advisor to the next president, Gerald Ford, until President Jimmy Carter dismissed him in 1977. During this time, Greenspan obtained a new master's degree in regulating the financial mechanisms of the state from Columbia University.

His departure from government positions was short-lived, as in 1981, Greenspan headed the commission on reforming the social security system in President Ronald Reagan's administration. After that, he held numerous positions, becoming a "jack-of-all-trades." During Reagan's presidency, Greenspan served as a member of the President's Foreign Intelligence Advisory Board, the Commission on Financial Institutions and Regulation, and the Commission on the Transition to Military Service by Contract, among others.

Greenspan's ascent to the throne of the chief regulator of the US financial system was unexpectedly modest. In 1987, the then-chairman of the Federal Reserve, Paul Volcker, unexpectedly resigned, and President Reagan offered the position to Greenspan. At the age of 61, Greenspan was confident in his ability to understand the needs of the largest economy in the world. It was the opportunity he had studied and defended master's theses for his entire life. As chairman of the FRS, Greenspan was not allowed to consult anyone, so he dissolved his consulting company, which he had worked for his entire life. Furthermore, as chairman, he could not serve on the boards of directors of companies, so Greenspan left lucrative positions in the aluminum corporation Alcoa, J.P. Morgan Bank, Mobil Oil, and the food giant General Foods. Greenspan embarked on the most ambitious task of his life. Despite receiving the lowest salary among the heads of central banks of the G7 countries, only $171,900 per year (less than the income of an average cosmetic surgeon), Greenspan worked diligently. He no longer had the luxury of waking up late, as he used to do. Instead, he woke up at 5:30 a.m. and spent one and a half hours in a specially designed bathtub with armrests and shelves for papers. He used this time to read documents and prepare speeches.

Soon, Americans could not imagine how they had lived without Greenspan. From the beginning, he showed himself to be a proponent of strict monetary policy with the main goal of controlling inflation. He remained a consistent supporter of liberal economics and, contrary to his own father's views, advocated minimizing government intervention in the economy. Rarely speaking publicly and never revealing the motives behind his decisions, Greenspan became famous for his precise strikes, which were incredibly effective. After the "Black Monday" market crash on October 19, 1987, when the Dow Jones Index fell by 508 points in a single day, Greenspan took decisive measures that were later recognized as infallible.

From that moment on, Greenspan's actions were seen as divine revelations, and he was hailed as the "best chairman of the FRS of the 20th century." His cunning and foresight led him to put his immense authority in the service of the American economy. Before publishing his legally required financial disclosure reports in the 1990s, he sold stocks and bought government bonds with the proceeds. The disclosure of this information was enough to cause a drop in stock prices and an increase in government bonds, thereby cooling the market. In 1996, Greenspan managed to cool down an overheated stock market simply by suggesting that, in his opinion, stocks had not risen too high. In 1998, Greenspan skillfully resisted the effects of financial crises in Latin America, Southeast Asia, and Russia, lowering interest rates three times.

Critics of Greenspan accuse him of only favoring the most necessary measures and insisting on long-term monetary policy. One of the main criticisms is his opaque and unpredictable policy regarding changes in interest rates. While most central banks in the world operate within target inflation rates, Greenspan never revealed the criteria behind his decisions. Even his direct subordinates complained that they did not know how the Fed's policy would change tomorrow.

Nevertheless, Greenspan's actions led to the unemployment rate in the United States reaching its lowest level in over two decades, at 4%, and the inflation rate dropping to 1.5%, its lowest level in 11 years, by the end of the 1990s. It is no wonder that Greenspan remained the head of the FRS under four presidents, both Democrats and Republicans. He was valued primarily for his ability, as Congressman Frank Iacarda from Texas put it, to know "how many screws with flat heads are used to assemble a Chevrolet car and what would happen to the American economy if three of them were left unturned." When asked what he would do first in the event of an economic crisis, President George W. Bush replied, "I will immediately contact Alan Greenspan."

In 1997, at the peak of his fame, Greenspan married for the second time. His chosen partner was Andrea Mitchell, an international correspondent for NBC. They had been dating for 12 years prior to their marriage. The couple lives in a townhouse owned by Mitchell in the suburbs of Washington, D.C. They are often seen together at theater premieres, and Greenspan enjoys playing tennis. At the age of 79, he is now ready to retire.

Replacing him as the head of the FRS is Ben Bernanke, the chairman of the President's Council of Economic Advisers under President George W. Bush. Although Bernanke has spoken about the need for the FRS to establish target goals to make its policies more predictable, no one in the market takes these intentions seriously. After all, it would require him to break the system established by the "best chairman of the FRS of the 20th century." It would be like challenging the authority of God Himself.