PROFILE of Federal Reserve System
chairman Alan Greenspan, 74... Writer
tells about his appearance before the Senate
Committee on Banking... He
has a face that resembles that of a mountain rescue dog. Lines on his
forehead are not mere wrinkles but waves etched into his skull. He has
sad brown eyes, a big, bulbous nose, and a long, narrow mouth, the
corners of which are often turned down, giving him a mournful cast...
Tells about his exposure during the bull stock market... This past
January, President Clinton nominated him for a fourth four-year term as
Fed
chairman. In length of service, Greenspan has now surpassed all his
predecessors save two. Assuming he remains healthy—and he has never had
a major illness—he will complete his fourth term at the start of 2004,
when he will be seventy-seven. He was born on March 6, 1926, in New
York City. His parents were both Jewish: Herbert Greenspan, a
self-educated financier, and Rose Goldsmith, a fun-loving girl of
seventeen who liked to sing and dance. Three years after Greenspan was
born, Herbert and Rose divorced. Rose moved back in with her parents,
in Washington Heights, and took a job in a furniture store across the
Harlem River, in the Bronx. Greenspan was brought up as the only child
of a single mother, to whom he remained devoted. Tells about his school
days at N.Y.U. Writer quotes Robert Kavesh, who went on to become a
professor of economics at N.Y.U... In many ways, Greenspan’s job hasn’t
changed much since the fifties. He is still paid to analyze economic
trends and predict future developments. The difference is that, along
with other members of the Federal Open Market Committee, which is the
policymaking arm of the Federal Reserve System, he now gets to set
interest rates, not merely analyze them... Describes brief marriage and
annulment... The failure of the marriage left a lasting mark on
Greenspan—it would be more than forty years before he remarried—but it
was through Mitchell Blumenthal that he met a woman who became his
close friend and intellectual mentor: Ayn Rand, the Russian-born
novelist, libertarian, and libertine. ...The Fed’s policy of watchful
inaction helped to sustain a virtuous circle in the
economy. With
interest rates low and consumers optimistic, American firms invested at
record rates, especially in information technology. All this new
investment paid off in higher productivity growth, which, in turn, led
to increased profits, thereby encouraging firms to invest even more.
This self-reinforcing process produced the longest economic expansion
on record, but eventually it also presented Greenspan with an acute
dilemma: Had it gone too far, producing an economy that was performing,
in some ways, too well?... Tells about a birthday celebration in
Boston, and his subsequent speech on information technology...In 1929,
the revered Fed chairman Roy A. Young saw his good name destroyed
overnight by the Great Crash; in the early nineteen-seventies,
Greenspan’s old mentor Arthur Burns was similarly tarnished by the
onset of stagflation. If Greenspan succeeds in slowing down the economy
without provoking a recession, he will, surely, go down as one of the
great Fed chairmen...