Greenspan, Former Fed Chairman, Dies at 100... The Light and Shadow of the Global Economy's "Maestro" (Comprehensive)

Fed Chairman Who Contributed to U.S. Economic Boom
Also Blamed for Global Financial Crisis

Alan Greenspan, former Chairman of the United States Federal Reserve (Fed) who wielded significant influence over the global financial markets at the end of the 20th century, passed away on June 22 (local time). He was 100 years old.

The Fed announced his passing in a statement on this day, saying, "His contributions to monetary policy and economic theory have left a lasting legacy on the Fed, the economics community, and American society." According to foreign media reports, he died at his home in Washington, D.C. due to complications from Parkinson's disease.

Alan Greenspan, former Chairman of the United States Federal Reserve Board (FRB)

Greenspan was appointed as Fed Chairman by then-President Ronald Reagan in 1987 and led the U.S. central bank for nearly 19 years until 2006. He served under four administrations—those of Ronald Reagan, George H.W. Bush, Bill Clinton, and George W. Bush—spanning both Republican and Democratic parties, and was regarded as one of the most powerful policymakers in the global economy.

His tenure was tested from the very outset. When the Dow Jones Industrial Average plunged more than 22% in a single day during "Black Monday" in October 1987, Greenspan calmed market fears by announcing that the Fed would provide liquidity to the financial system. Thereafter, the U.S. enjoyed a long economic boom in the 1990s, with low inflation, improved productivity, and declining unemployment, earning Greenspan the nickname "the Maestro."

Greenspan's influence extended far beyond monetary policy. His words could sway global stock and bond markets, as well as the flow of the dollar. He was known for deliberately using ambiguous language during congressional testimony and speeches, believing that overly explicit signals could provoke the markets. The so-called "briefcase indicator," referring to the thickness of the briefcase he brought into meetings, was even rumored to signal policy changes.

Born in Manhattan, New York, Greenspan showed exceptional talent in mathematics as a child and once attended the Juilliard School to study clarinet and saxophone. As a teenager, he also played in a touring jazz band.

He later studied economics at New York University and built a reputation as an economic consultant on Wall Street. After entering Washington as an economic advisor to the Republican Party, he served as Chairman of the Council of Economic Advisers under the Gerald Ford administration before rising to lead the Fed.

Alan Greenspan, former Chairman of the U.S. Federal Reserve (Fed), is taking an oath before testifying at the Financial Crisis Inquiry Commission under the U.S. Congress.

However, his legacy underwent a dramatic reassessment after the financial crisis. The Financial Times reported that just two years after Greenspan left the Fed in 2006, the United States was hit by a massive financial crisis, and his monetary policy and regulatory philosophy were criticized for fueling one of the worst boom-and-bust cycles in modern financial history.

Critics argue that the Fed kept interest rates excessively low for too long in the early 2000s and ignored the need for strong supervision of the financial system. Greenspan himself acknowledged a "flaw" in his belief in free-market philosophy during a congressional hearing immediately after the collapse of Lehman Brothers.

In particular, under his leadership, the Fed lowered the benchmark interest rate to as low as 1% in the early 2000s, following the bursting of the dot-com bubble and the September 11 attacks. While this was seen at the time as a measure to prevent deflation, critics later contended that prolonged low rates fueled an overheated housing market and credit expansion. Additionally, lax oversight of derivatives and mortgage markets was seen as enabling excessive risk-taking within the financial sector.

He is survived by his wife, veteran NBC journalist Andrea Mitchell. In a statement, Mitchell described him as "a giant who shaped the American economy for decades under presidents from both parties" and "a man who was honest enough to admit his own mistakes."

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