Alan Greenspan, the influential former chairman of the Federal Reserve, died on Monday at the age of 100. He is remembered for an eclectic personal history, including early musical training at the Juilliard School where he studied saxophone and clarinet, and an important friendship and intellectual relationship with author Ayn Rand, whose Objectivist philosophy influenced his views on capitalism and regulation.
Greenspan served five terms as Fed chairman under four presidents, beginning in 1987, and presided over one of the longest economic expansions in U.S. history, from 1991 to 2001. During this period, he navigated significant events such as the dot-com bubble burst and the aftermath of the September 11, 2001, terrorist attacks. His stewardship in the 1990s earned him a celebrity status among central bankers.
Despite his success during the economic boom, Greenspan faced significant criticism, particularly in the wake of the 2007-08 financial crisis. Critics argue that his "easy-money policies" and his advocacy for financial sector deregulation contributed to the conditions that led to the housing bubble and the subsequent subprime mortgage meltdown. The Financial Crisis Inquiry Commission in 2011 specifically faulted him for failing to discourage the trade of securities backed by subprime mortgage loans and for promoting deregulation.
Greenspan's libertarian philosophy, partly shaped by Ayn Rand, led him to believe that bankers' self-interest would prevent undue risks, making heavy-handed regulation unnecessary. He later admitted, after the 2008 financial crisis, that this belief was mistaken. His legacy is thus marked by both the economic prosperity he fostered and the financial bust he failed to prevent.
