Alan Greenspan, the Federal Reserve chairman for nearly 20 years who was celebrated as a 'maestro' before the 2008 crisis, died at 100. He was the world's first celebrity banker, appointed five times by four presidents and serving from 1987 to 2006.
From Maestro to Humbled Figure
Greenspan died on June 22 at age 100. Before Mark Carney was called the George Clooney of global finance, Greenspan was the first celebrity central banker, improbably making gossip pages as an unlikely ladies' man. He dated Barbara Walters and married Andrea Mitchell.
He was all the presidents' man, appointed by Ronald Reagan, George Bush Sr., Bill Clinton, and George Bush Jr. Born in the same year as Marilyn Monroe (1926), he outlived her by 64 years, entering the inner circle of American presidents later and remaining there longer.
The Maestro's Record
Greenspan was celebrated as the 'maestro' of the American economy, navigating three major disruptions: the 1987 stock market crash, the aftermath of 9/11, and the bursting of the dot-com bubble. He presided over a long period of strong growth, low inflation, and low interest rates.
He was born in the sesquicentennial year of Adam Smith's Wealth of Nations (1776) and died in its semiquincentennial. Over that century, Smith's ideas waxed; Greenspan's tenure was both a sign and a cause of how dominant Smith's understanding of the economy was by the 1980s and beyond.
The 2008 Humbling
Shortly after Greenspan retired in 2006, a crisis began in American housing-related financial markets, leading to a global financial crisis. In October 2008, he was summoned before Congress to answer for his failure to sufficiently regulate housing finance.
He had believed self-interest would prevent reckless risk-taking in subprime mortgages. 'Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief,' he testified. It was a signal moment, as his previous appearances were marquee events where investors hung on every syllable.
Legacy and Lessons
The global financial crisis of 2008 undermined confidence in Smith's ideas, and Greenspan's great humbling came in his public confession that he had got some important things wrong. He trusted too much in the magic of self-interest to serve the common good.
Greenspan's long life and career left a complex legacy: a maestro whose reputation was shattered by the crisis he failed to foresee. He remains the world's first celebrity banker, a title that now carries both admiration and caution.
