Alan Greenspan, the longtime Federal Reserve chairman known as “the Maestro” who became one of the most influential economic policymakers of his era and famously warned of “irrational exuberance,” has died. He was 100.
The influential economist died Monday from complications of Parkinson’s Disease, said his wife of 29 years, Andrea Mitchell, the chief Washington correspondent and chief foreign affairs correspondent for NBC News.
Greenspan was appointed Fed chairman in 1987 by President Ronald Reagan and held the position — through busts and booms — until retiring in 2006. His tenure was the second longest, four months short of that of William McChesney Martin, who presided over the central bank from 1951 to 1970.
It was his unusual frankness in one televised speech, on Dec. 5, 1996, that set off a bit of market madness. Discussing the challenges of setting monetary policy, he said:
“How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? … We should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy.”
The phrase “irrational exuberance” was interpreted as a signal that Greenspan thought the market was overvalued. The Tokyo stock market, which was open at the time, sank 3% on the comment, and other markets subsequently tumbled. However, the markets quickly recovered and continued to climb until the dot-com bust in 2001.
Years earlier, in 1974, when he was chairman of the White House Council of Economic Advisers, Greenspan had to explain on Capitol Hill why the administration wasn’t whipping inflation now, as the Ford administration dubbed its war on rising prices. In a sure-to-befuddle Greenspanism, he said: “It is a tricky problem to find the particular calibration in timing that would be appropriate to stem the acceleration in risk premiums created by falling incomes without prematurely aborting the decline in the inflation-generated risk premiums.”
“Some folks, especially money managers who shovel vast amounts of cash from one pile to another, think about Greenspan a lot,” Linton Weeks and John M. Berry wrote in The Washington Post in March 1997. “They watch his every word, mark his every move, graph his every grin. Because second to the president, Alan Greenspan is arguably the nation’s most powerful person. … With a couple of choice words he can momentarily send the stock market to heaven or hell.”
In an apparent bid to avoid rocking the markets or not showing the Fed’s hand until it was time, Greenspan would cloak his utterances in language that left the sharpest minds — including those of contentious members of Congress — scratching their heads.
“His long, convoluted sentences seem to take away at the end what they have given at the beginning as they flow to new levels of incomprehensibility,” The Washington Post’s Bob Woodward said in his 2000 biography “Maestro: Greenspan’s Fed and the American Boom.”
After his retirement from the Fed, Greenspan confessed his strategy for using perplexing language with a clear explanation.
“It’s a language of purposeful obfuscation to avoid certain questions coming up, which you know you can’t answer, and saying ‘I will not answer’ or basically ‘no comment’ is, in fact, an answer,” he said in a 2007 interview on CNBC. “So, you end up with when, say, a congressman asks you a question, and [you] don’t want to say, ‘no comment,’ or ‘I won’t answer,’ or something like that. So, I proceed with four or five sentences which get increasingly obscure. The congressman thinks I answered the question and goes on to the next one.”
Some folks, especially money managers who shovel vast amounts of cash from one pile to another, think about Greenspan a lot. They watch his every word, mark his every move, graph his every grin. Because second to the president, Alan Greenspan is arguably the nation’s most powerful person. … With a couple of choice words he can momentarily send the stock market to heaven or hell.”
Linton Weeks and John M. Berry
The Washington Post, March 1997.
Greenspan was born to Jewish parents on March 6, 1926, in New York’s Washington Heights. His father was a stockbroker and financial analyst. As a boy growing up in the 1930s during the Great Depression, the future Fed chairman received an allowance of a quarter a week.
“Twenty-five cents, I will tell you, bought a lot more then than it does these days,” Greenspan told an audience in 2003.
Greenspan played the clarinet and saxophone and briefly attended the Juilliard School. He played in Woody Herman’s jazz band (as did another future White House official, Leonard Garment), before he enrolled in New York University, earning bachelor’s and master’s degrees in economics by 1950. He eventually received his Ph.D. in 1977 — at age 51.
Among his teachers and mentors were the future Fed Chairman Arthur Burns and the free-market proponent Ayn Rand, to whom Greenspan was introduced by his first wife, the artist Joan Mitchell.
By the time he received his doctorate, he had worked at Brown Brothers Harriman, the National Industrial Conference Board and the Townsend-Greenspan consulting firm, which closed after he was nominated as Fed chairman. His three-decade stint at Townsend-Greenspan was interrupted when he served as chairman of President Gerald Ford’s Council of Economic Advisers from 1974 to 1977. From 1981 to 1983, he was chairman of the National Commission on Social Security Reform.
His first job as an economist didn’t pay much more than his childhood allowance: He got $45 a week.
The first of his five terms at the Fed began just before the 1987 financial crisis. The Senate confirmed his nomination to succeed Paul Volcker on Aug. 11.
That was only 69 days before “Black Monday” crushed Wall Street on Oct. 19. The Dow Jones Industrial Average sank 508 points — 22.6% — in the session, the biggest one-day sell-off in history. The next day, Greenspan affirmed the Fed’s readiness “to serve as a source of liquidity to support the economic and financial system.” His central bank lowered short-term interest rates to encourage banks to lend on their usual terms.
The strategy helped calm the jitters and avoid a recession and banking crisis. Within two days, the Dow regained more than 50% of its Black Monday losses. The bravado also helped earn Greenspan the sobriquet “Maestro” from supporters. Years later, critics blamed the easy money policy — the “Greenspan put” he used to help calm market panics — for conditions that brought on the Great Recession.
“It’s HIS economy, stupid,” Fortune magazine declared in March 1996, throwing back at President Bill Clinton the campaign slogan he used in defeating President George H.W. Bush four years earlier. “In Greenspan We Trust,” the article’s headline said.
After that white-knuckle start, he led the Fed through two recessions, the 1997 Asian financial crisis, the 1998 Russian financial default, the 1998 bailout of the hedge fund Long-Term Credit Management, the Sept. 11, 2001, terrorist attacks and the dot-com boom and bust of the late ’90s through 2001.
Throughout, he focused on fighting inflation over promoting full employment. His supporters say he presided over the longest economic expansion in U.S. history, but critics said Greenspan’s low interest-rate policies set the stage for the housing bubble that burst into the Great Recession a year after his successor, Ben Bernanke, took the Fed helm.
“Sometimes I get criticized, and I deserve to be criticized, and that’s part of the game,” Greenspan told USA Today in 2007. “But this one, I’m innocent.”
Greenspan acknowledged that he knew about the questionable lending practices that encouraged subprime borrowers to opt for risky adjustable-rate mortgages.
“While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” he said in a 2007 interview with CBS’ “60 Minutes.” “I really didn’t get it until very late in 2005 and 2006.”
And in his best-selling memoir “The Age of Turbulence,” he defended the low-rate policy, which encouraged people to buy homes: “I believed then, as now, that the benefits of broadened homeownership are worth the risk. Protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support.”
Greenspan wrote the book in longhand, mostly while soaking in a bathtub because of a back injury. In fact, most of his speeches were penned that way after he injured his back in 1971.
After he left the Fed, Greenspan opened his own consulting firm, Greenspan Associates.
Greenspan’s first marriage ended in divorce after less than a year. In 1997, he married NBC journalist Andrea Mitchell, also a Washington denizen and fellow classical music aficionado 20 years his junior, in a ceremony officiated by the late Supreme Court Justice Ruth Bader Ginsburg.
In his 2007 memoir, he praised presidents Ford and Clinton, but harshly criticized President George W. Bush for not reining in spending.
President George W. Bush (L) with Alan Greenspan (R) after Ben Bernanke was sworn in as Federal Reserve chairman, Washington, Feb. 6, 2006.
Jim Watson | AFP | Getty Images
“Little value was placed on rigorous economic policy debate or the weighing of long-term consequences,” the self-described libertarian Republican wrote. “They swapped principle for power. They ended up with neither. They deserved to lose.”
He also was critical of President Donald Trump’s first-term bashing of the Fed in an effort to get interest rates lower. Appearing on CNBC’s “Squawk on the Street” shortly after a December 2019 Trump tweet aimed at the central bank, Greenspan said: “He’s wrong in even discussing the issue. The Federal Reserve is a very professional outfit. They know more about the economy’s functioning, how it affects the money markets and the interest rate structure, far more than he does. … The best thing to do is to just disregard it. I didn’t hear this morning that the president made a statement. I’m sure it was ill-advised.”
During Trump’s second term, in January 2026, Greenspan signed a joint statement with a handful of other former Fed and Treasury officials to denounce a criminal probe of Fed Chair Jerome Powell.
“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” read the statement, backed by Greenspan and more than a dozen other signatories.
Greenspan recognized the limits of the Fed’s influence. Asked during a 2008 interview on CNBC whether the central bank should be given more power to regulate investment banks, he responded:
“What I am concerned about is basically the Fed being given the role to oversee the financial stability system. I don’t think anyone can do that, and I’m most worried that were the Fed to take that job on and fail, as everyone else has and will, you cannot anticipate the future. I think it undermines the credibility of the central banking system.”
Ultimately, he realized that despite all the science involved in economics, financial risk management can’t win in meltdown situations like the Great Recession.
“Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria,” he told The Associated Press after publication of his book “The Map and the Territory 2.0” in 2013. “Bubbles go up very slowly as euphoria builds. Then fear hits, and it comes down very sharply. When I started to look at that, I was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.”