Remember the great Allen Greenspan?
In 1980's Greenspan's predecessor, Paul Volcker, made the bold -- but widely unpopular -- decision to send the American economy into a major recession in order to curb the rampant inflation of the time. Many in the likes of Milton freedman believed that recessions were missteps of the federal reserves, thus Volcker was a prime example for a Fed induced recession. Unlike Volcker, Greenspan didn’t have to take dramatic steps to manage the economy. Greenspan was also accredited for steadying things during the "Black Monday" market crisis in 1987, the late 90's currency crisis and the hedge fund collapse that resulted due to Russian loan defaults. Even after 9/11 the American economic recovery was widely attributed to Greenspans voice of reasoning and strength.
Greenspan unlike many was the luckiest of the lot. He reigned during the longest period of an American economic boom, a result of a rapid technological advancement and trade. Thus inflation remained low and unemployment was less, making Greenspans job a lot easier. He was famous for his "inflation targeting", in which the Fed makes public a projected inflation rate, effecting a greater transparency in likely Fed moves to raise or lower short-term interest rates, a practice which Bernanke later replaced by providing a "targeted minimum level of inflation".
Greenspan was a keen supporter of the Bush administration. Economist Paul Krugman, a frequent Greenspan critic, wrote in the New York Times that Greenspan was a "three-card maestro" with a "lack of sincerity" who, "by repeatedly shilling for whatever the Bush administration wants, has betrayed the trust placed in the Fed chairman'". Yet Allen Greenspan wrote in his 2007 book, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil". One wonders whether his close relationship with the famous American philosopher Ayn Rand (who advocated objectivism against positivism) might have influenced him to develop this objectivistic insight into American politics.
In 1980's Greenspan's predecessor, Paul Volcker, made the bold -- but widely unpopular -- decision to send the American economy into a major recession in order to curb the rampant inflation of the time. Many in the likes of Milton freedman believed that recessions were missteps of the federal reserves, thus Volcker was a prime example for a Fed induced recession. Unlike Volcker, Greenspan didn’t have to take dramatic steps to manage the economy. Greenspan was also accredited for steadying things during the "Black Monday" market crisis in 1987, the late 90's currency crisis and the hedge fund collapse that resulted due to Russian loan defaults. Even after 9/11 the American economic recovery was widely attributed to Greenspans voice of reasoning and strength.
Greenspan unlike many was the luckiest of the lot. He reigned during the longest period of an American economic boom, a result of a rapid technological advancement and trade. Thus inflation remained low and unemployment was less, making Greenspans job a lot easier. He was famous for his "inflation targeting", in which the Fed makes public a projected inflation rate, effecting a greater transparency in likely Fed moves to raise or lower short-term interest rates, a practice which Bernanke later replaced by providing a "targeted minimum level of inflation".
Greenspan was a keen supporter of the Bush administration. Economist Paul Krugman, a frequent Greenspan critic, wrote in the New York Times that Greenspan was a "three-card maestro" with a "lack of sincerity" who, "by repeatedly shilling for whatever the Bush administration wants, has betrayed the trust placed in the Fed chairman'". Yet Allen Greenspan wrote in his 2007 book, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil". One wonders whether his close relationship with the famous American philosopher Ayn Rand (who advocated objectivism against positivism) might have influenced him to develop this objectivistic insight into American politics.
