The Man Who Knew: The Life and Times of Alan Greenspan — Introduction: “HE HAS SET A STANDARD”

1. 1. In 1986, President Reagan insisted inflation must be forced to zero, rejecting any acceptable inflation rate above zero.
2. 2. Milton Friedman advocated for a monetary rule—a fixed annual increase in money supply—rather than a return to the gold standard.
3. 3. Alan Greenspan, then a private consultant, challenged Friedman by advocating for a commodity standard like gold.
4. 4. Greenspan was sworn in as Federal Reserve chairman in August 1987, despite his earlier criticism of central banking.
5. 5. Greenspan's tenure achieved stable prices, with average annual inflation of just 2.4% over 18.5 years, surprising critics like Friedman.
6. 6. After the 2008 financial crisis, Greenspan's reputation shifted from maestro to villain, blamed for inflating a bubble through heedless incompetence or laissez-faire ideology.
7. 7. Greenspan was not a simple ideologue; he was a pragmatist who advocated tax hikes, supported bailouts, and advised anti-Semitic figures despite being Jewish.
8. 8. As Fed chairman, Greenspan cut interest rates aggressively to cushion market shocks, encouraging risk-taking despite his earlier warnings about credit cycles.
9. 9. Greenspan's regulatory stance was not naive faith in efficient markets but a realistic view that regulators could not do better than private actors.
10. 10. Financial deregulation was not a right-wing conspiracy but a bipartisan effort by technocrats grappling with deep forces of financial evolution.
11. 11. Greenspan's story serves as an antidote to the delusion that statesmen can qualify as 'maestros' who eliminate financial risks.