A Short Bio of Alan Greenspan
Alan Greenspan and the Federal Reserve

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Greenspan and the Fed
By Motley Fool Staff

Alan Greenspan, chairman of the Federal Reserve Board, has risen to power thanks to an unusual combination of intellectual rigor and political dexterity. While Greenspan is in certain respects a prototypical economic egghead, more at home with volumes of statistics and charts forecasting future growth than with public speeches, he has also demonstrated over the last decade a surprising sensitivity to political currents and an ability to balance his desire for independence with the realization that he serves at the discretion of the president.

Greenspan's ability to fuse an intellectual sensibility with a political one has guided much of his career. He was born in 1926 in New York City, the son of a stockbroker and a saleswoman. As legend would have it, Greenspan was a mathematical prodigy early on, displaying a gift for solving puzzles in his head that family friends were still talking about years later. It is telling that Greenspan made the seemingly incongruous choice to attend The Juilliard School after high school, and played clarinet and saxophone in a traveling swing band as World War II was ending.

His musical career was not to be, though. Greenspan got his Bachelor of Arts and Master's degrees in Economics from New York University and then went to Columbia University to pursue his Doctorate. Like more than a few graduate students, though, Greenspan left Columbia when he ran out of money, going to work for the National Industrial Conference Board (NICB) as a professional economist. He eventually got his Ph.D. from NYU in 1977, without ever having to write a dissertation.

In the 1950s, Greenspan, who had been steeped in the free-market skepticism of John Maynard Keynes along with most economists of his generation, became an acolyte of Ayn Rand. Rand's philosophy of what she termed "enlightened selfishness" bears considerable similarity to today's libertarianism. Greenspan met Rand through his first wife, painter Joan Mitchell.

Although Greenspan's friends and colleagues suggest that his relationship with Rand's Objectivism was more of a flirtation than a real commitment, Greenspan remained part of the philosopher's circle until at least the late 1960s. In addition to writing for The Objectivist, a rather surprising essay he wrote in defense of the gold standard -- surprising in light of his later work, that is -- appeared in the Rand-edited 1967 collection of essays Capitalism: The Unknown Ideal. Still, something about Greenspan's obvious pragmatism and political instincts fits poorly with the uncompromising sense of purity that characterizes Rand's heroes. If Greenspan ever was an Objectivist, his years in Washington have probably made him reconsider.

After leaving the NICB, Greenspan and bond trader William Townsend opened an economic consulting company that worked behind the scenes, offering economic forecasts to large corporations and financial institutions. In many respects, Greenspan's work there resembled the work he would come to do at the Fed. Townsend-Greenspan filled a business need at a time when few corporations had professional economists on their staff.

Greenspan worked as a Director of Policy Research for Richard Nixon in the 1960s, but did not come to Washington until the 1970s, when he served as Chairman of the Council of Economic Advisers (CEA) under Gerald Ford. It was a difficult time to be in any way responsible for the American economy, which was reeling from the 1973 oil crisis, the imposition and subsequent repeal of wage and price controls, and the resignation of President Nixon. Greenspan got plenty of experience being grilled by angry senators and congressmen during his tenure at the CEA, experience that undoubtedly has been useful during his time at the Fed.

After the election of Jimmy Carter, Greenspan returned to private life, although he did serve as Chairman of the nonpartisan Social Security Commission in the early 1980s. He stayed at Townsend-Greenspan until 1987, when he was appointed Chairman of the Fed by Ronald Reagan. In the years since, Greenspan -- who for all his gnomic ways seems to enjoy his nights out -- has become a staple of the D.C. social scene. In 1997 he married NBC News correspondent Andrea Mitchell, whom he had been dating for almost a decade. Greenspan may not yet qualify as a politician, but in recent years he's certainly come out from behind the curtain.

For more information on Greenspan, there have been several recent books on his life and career, including Maestro: Greenspan's Fed and the American Boom, by Bob Woodward, and Greenspan: The Man Behind the Money, by Justin Martin.

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