Alan Greenspan died at the age of 100: The former head of the US Fed succumbed to complications of Parkinson’s disease | Today’s news

Alan Greenspan, hailed as the Federal Reserve’s greatest chairman when he retired in 2006 but mocked by the severe financial crisis that followed barely two years later, died Monday at the age of 100, NBC News reported.

Greenspan, who had a powerful influence on the U.S. economy during his tenure as Fed chief from August 1987 to January 2006, died at his home of complications from Parkinson’s disease, NBC reported, citing his wife, Andrea Mitchell, who is the newspaper’s chief Washington correspondent.

Greenspan oversaw the second-longest economic expansion in U.S. history, a continuous decade of growth from March 1991 to March 2001. His decision to let the economy run—despite pressure to raise interest rates against an inflationary threat that never materialized—helped fuel years of American prosperity and earned him rock star status as an economic “maestro.”

This era was marked by his prescient judgment that the surge in productivity in the mid-1990s would keep inflation under control.

His intuition is still a touchstone for policymakers at the moment, and former Fed chairman Jerome Powell has spoken of it as an example of how judgment can sometimes trump technical models of the economy.

However, the former jazz musician’s monetary policy prudence later came into question when critics attacked his policies for fueling a series of asset price bubbles and laying the groundwork for the 2007-2009 financial crisis.

“I think the deification that came right before the financial crisis was never really deserved, and I think the criticism he received after he left was never fully deserved,” said Stephen Oliner, a former senior Fed official.

Greenspan, who fell in love with mathematics through an obsession with baseball statistics, won quick recognition for his strong response to the Black Monday stock market crash of 1987, just two months after taking office.

He also steered the US economy through the 1990-91 recession, the Asian and Russian financial contagion of 1997-1998, the bursting of the stock market bubble in 2000, and the turbulent economic aftermath of the September 11, 2001 attacks.

Along the way, as biographer Sebastian Mallaby described, he became the consummate Washington power player, able to maneuver presidents and cabinet secretaries into making the decisions he thought best, sometimes without them realizing who was pulling the strings.

At the much-vaunted Jackson Hole gathering in 2005, two leading economists called him perhaps the greatest central banker of all time.

But when the housing bubble that grew during his last four years in office finally burst, it destroyed his once-stellar reputation — along with the global economy.

Whatever Greenspan’s merits at this point, his successors have steadily pushed the Fed in a new direction, introducing financial crisis response tools to address problems Greenspan never faced, such as zero interest rates, and a shift from opaque communications to more frequent speeches, an inflation target, and regular press conferences.

In addition to criticizing his monetary policy, critics have slammed Greenspan, a powerful advocate of light regulation of financial markets, for a careless approach that allowed banks to make disastrous bets on the housing market.

Greenspan subsequently admitted that he was “shocked” that he was wrong in his assumption that bankers’ self-interest would deter them from taking actions that threatened the survival of their own institutions.

“Those of us who have looked to the self-interest of lending institutions to protect shareholder equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform in 2008.

But as he apologizes in Washington, he falls far short of what his staunchest critics were looking for.

Some economists also believed that the chairman, who has never hidden his Republican identity, compromised his political independence by supporting tax cuts proposed by President George W. Bush in 2001, although he also worked closely with Democratic President Bill Clinton.

Greenspan, the second longest-serving Fed chairman behind William McChesney Martin, was first elected by President Ronald Reagan in 1987 and later reappointed by Presidents George HW Bush, Bill Clinton and George W. Bush.

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He was 80 when he left the Fed in 2006, but he transitioned smoothly into a new career as a consultant and advisor at his own firm, Greenspan Associates, which offers information on where he says the economy is headed for big fees.

At the Fed, Greenspan built on the successes of his predecessor, Paul Volcker, who tamped down the rampant inflation of the late 1970s and early 1980s. Greenspan has actually spent more time at the central bank worrying about the risks of deflation than the resurgence of high inflation over the past few years.

The decade-long expansion of the 1990s was fueled in part by a huge rally in stocks, which Greenspan suggested in 1996 might reflect “irrational exuberance”. He later backtracked on that comment, saying it was not his role to second-guess investors.

Greenspan has often been referred to as the second most powerful person in the country, after the president, because of the central bank’s ability to influence the economy through changes in short-term interest rates.

Thoughtful, serious and quiet, he expounded his views in elliptical testimonies and speeches which scholars have endlessly dissected. He once warned a group of economists that they spend a lot of time worrying about being too bright.

“What I learned at the Fed is a new language called ‘Fed speak.’ We learn to mumble with great incoherence,” he said.

He could speak in such a way that his wife Andrea Mitchell said she “just didn’t get it” when he first proposed marriage. The couple dated for 12 years before getting married in April 1997. It was the second marriage for both.

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Greenspan said he did his best in the bathtub, indulging in baths that sometimes lasted two hours as he read the news and wrote speeches and public testimony.

Born in New York City on March 6, 1926, Greenspan was the only child of Rose and Herbert Greenspan. His parents divorced when he was young and he grew up in a small apartment in the Washington Heights section of New York with his mother and grandparents.

Greenspan’s first love was music, and he spent two years at New York’s Juilliard School studying the clarinet. He briefly toured with a swing band as a saxophone player before studying economics at New York University.

In his youth, Greenspan was a friend and companion of writer Ayn Rand, who championed the supremacy of the free market and the profit motive in books such as “Atlas Shrugged” and “The Fountainhead.”

Before his Fed years, he chaired President Gerald Ford’s Council of Economic Advisers in the 1970s. For years he also led the economic consulting firm Townsend-Greenspan and Co.

When Greenspan succeeded Volcker, some feared he might not live up to his hard-nosed, cigar-chomping predecessor.

But Greenspan soon proved his mettle by pumping liquidity into financial markets to calm the stock market crash of October 1987. His swift action, now considered a textbook example of how to handle such crises, was credited with averting the recession.