August 11: Chairman Greenspan

Alan Greenspan was confirmed by the U.S. Senate to be chairman of the Federal Reserve Bank on this date in 1987, a post he would hold until 2006. Governing the Fed during the boom years of the Clinton administration, Greenspan became the infallible pope of economists until his easy-money policies, lack of action regarding the housing bubble, encouragement of policies that permitted commercial banks to function as investment houses, and libertarian attitudes towards government regulation yielded America’s current recession and criminal financial mess. Time magazine named him third on its list of “25 People to Blame for the Financial Crisis,” after Angelo Mozilo of Countrywide Financial and former Senate Banking Commmittee chair Phil Gramm. Greenspan also politicized his post more than previous Fed chairs by supporting the privatization of Social Security and the Bush tax cuts for the wealthy. Paul Krugman accused him of “repeatedly shilling for whatever the Bush administration wants” and “betraying the trust” placed in the Fed chair.
“I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.” —Alan Greenspan