Alan Greenspan is an influential American economist who was a chairman of Federal Reserve of The United States from 1987 to 2006. Before he was appointed the chairman, he had a successful consulting career. Several individuals were greatly amazed by his concepts and thoughts since he adopted the philosophy of self-interest, laissez-fair capitalism, and individual effort. As the chairman of Federal Reserve Board, he formulated monetary policies aimed at reducing the dangers associated with recession and inflation. Alan Greenspan is credited for the longest formal economic expansion in American history (Batra, 5).
He is among the internationally most influential and powerful personality, and he had been with several awards and honors. However, his image was greatly affected in 2011 when the Financial Crisis Inquiry Commission discovered that a lot of the monetary policies were detrimental to the economy in the long run.
Alan Greenspan was the country's bank regulator although his famous economic prognosticator failed to see the financial implosion coming. This was majorly as a result of progressive social spending and taxes, stagnant wages, and antipathy towards market regulation was to blame for slow growth.
He advocated for new global rules in the utilization of general reserve. However, he did not accept the responsibility for the crisis that ensued on the Federal Reserve. Instead, he shifted blame to policy makers for imposing massive new rules and for bailing the financial system.
Alan Greenspan is both a politician and renowned economist. In periods of ideological changes in the United States, he was comfortable in both Republican and Democratic camps without diverting from his objectives of economic growth and keeping the level of inflation checked.
He looked indispensable in times of anxieties of economic stocks in the White House. President Clinton had benefited from his help in several ways, ranging from bailing Mexico to urging a rise in the debt by avoiding a government defaulting that certain Republicans were tolerant with the aim of forcing a budget deal (Meltzer, 54).
Alan Greenspan is unpredictable man, and some individuals argue that his words differ with the actions. In several occasions, he recommends the state to avoid meddling in the economy but turns it in persistent tweaking in interest rates. He advocates for political passiveness in the Central Bank but plays as an activist in political events ranging from a continuous debate on how to calculate adjustments on inflation in Social Security to the winter's bailing out of Mexico.
He enjoyed a very long career as an insider of Washington with moderate tone and unflappable pursuit of the economic centre. At the same time he retains a personal philosophy in terms of libertarianism as a result of friendship with late Ayn Rand, who always argued that the state was a necessary evil.
He watched the world's economic rate since 1954. The experience gives him an extraordinary array of obscure economic statistics for ideas on the economic health. The analysis of everything from retail sales to gold prices is an essential element of his popularity.
However, several monetarists believe that he should have focused more on the long-term growth in the monetary supply in economy. They advocate for long term issues of the economy rather than the monthly changes in economic indicators. He received a lot of backing when he advised that the current monetary policy throws an economy into recession during the election year.
Publicly, Alan Greenspan image is a centrist as he kept his beliefs greatly to himself. Congregational individuals did not hear him spoke of Ms Rand. She was the prophet of capitalism who died in 1982. He is becoming more reticent of his beliefs even at the time when the brand of individualism was accepted for last 20 years.
He describes her as his most important element in his life when he spoke about it on rare occasions. Alan Greenspan displays a political savvy or what critics termed as over cautiousness. This is shown when he proposed the decrease in the benefits and modest model of increasing tax when he was first appointed as chairman of Federal Reserve.
His reputation with Clinton administration was much warmer making some of the Republican members uncomfortable. He comforted the administration through lobbying the Congress to support the Mexico bailout. The personality had warned on several occasions about dangers of stagnation of the middle class and thus was seen as an adviser to the Clinton’s administration. Alan Greenspan was accused by the critics of being secretive and pursuing tight monetary policies in the United States. As a Federal Reserve chairman, he brought some personal nature skills that were impressive. Politicians and the general public sought the advice Federal Reserve staff on many issues due to the skills provided by Alan Greenspan.
Alan Greenspan’s global influence was considered extensive as he was recognized as among the three most powerful people in the British Isles. He has served as chairman of Federal Reserve for eighteen and a half years, and none of the country's other policy maker has served for so long whether as chairman of Federal Reserve or other public office (Meltzer, 31).
He had affection for Gerald Ford whom he served as the chief White House economist. Also, he did not get along personally with Jimmy Carter as he did not seek his advice as the president although they had pushed for policies such as deregulation of industries and a measure prominently policy.
He was criticized for the widely publicized and decisive support for President Bush's tax act. He discusses his idea on tax act claiming that his support was as an assumption that spending restraint of the individuals will follow.
Alan Greenspan believed in the power of private economic activity organized in competitive and free markets. He argues that government interference is a bad idea as he termed free markets as robust and efficient. During his time as chairman in the Federal Reserve, he gave advice, took corrective action, provided instructions and took an initiative to anticipate on the difficulties the market might face (Mitroff, & Can, 34). Examples include the wave of financial problems in many Latin American and Asian countries beginning in 1997, the passage of millennium from 1999 to 2000 and the 1987 stock market crash. He treated financial markets as delicate matters that need careful attention and nursing. During Federal Reserve and Ford White House, Alan Greenspan consistently advocated a Keynesian Stimulus (through lower tax rates or tax rebates) whenever he thought the economy needed a boost.
One familiar occasion that does not stand up is that Federal Reserve under him was at fault for maintaining the interest rates too low for a long time, therefore allowing prices to soar as high as they did.
Alan Greenspan was a logical positivist, but he was converted to Objectivism. He later became a proponent of Objectivism writing articles for objectivism newsletters and contributing several essays in capitalism book. However, he has come under criticism from several individuals who believe his actions while at Federal Reserve and publicly expressed ideas and opinions of abandoned Objectivism and a free market. He admitted that his free-market ideology shunning certain regulations was flawed (Woodward, 10).
His policies of adjusting the interest rates contributed to the bubble in the United States. He publicly admitted that he put too much faith in the self-adjusting power of free markets, and this was an error of regulation in the marketplace.
On the other hand, Alan Greenspan has received several awards due to its reputation as a leader of Federal Reserve in the United States. He has been honoured on several occasions as he who changed the economy of the United States in his monetary policies especially the reduction in the interest rates which had adverse effects on the world's economy (Bordo, & William, 12).
Conclusion
The track record set by Alan Greenspan after leaving office is remarkable. He has been a debt and an inflation fear monger, helping to make his successor's reign harder as he famously campaigns about ungrateful markets that keep failing to deliver the crisis as he predicted.
He has denounced regulation and proclaims that markets get it right with notably rare occasions. Since he left Federal Reserve in 2006, he has had almost divine status in the eyes of the media and press and quite a few economists. The former chairman's reputation has faltered badly since he left Federal Reserve with a lot of difficulties to be dealt with by the incoming staff. Alan Greenspan is a popular personality in the United States in matters of economy and politics, and helped shape up the nation's economic conditions during his time as the chairman of Federal Reserve (Cargill, & Ferald, 22).
Works Cited
Batra, Ravi. Greenspan's fraud: how two decades of his policies have undermined the global economy. Macmillan, 2014.
Bordo, Michael D., and William Roberds. The origins, history, and future of the Federal Reserve: a return to Jekyll Island. Cambridge University Press, 2013.
Cargill, Thomas F., and Ferald P. O'Driscoll Jr. "Federal Reserve independence: Reality or myth." Cato J. 33 (2013): 417.
Meltzer, Allan H. "What's Wrong With the Federal Reserve: What Would Restore Independence&quest." Business Economics 48.2 (2013): 96-103.
Mitroff, Ian I., and Can M. Alpaslan. "Economic Crises." The Crisis-Prone Society: A Brief Guide to Managing the Beliefs that Drive Risk in Business. Palgrave Macmillan US, 2014. 39-49.
Woodward, Bob. Maestro: Alan Greenspan And The American Economy. Simon and Schuster, 2012.
