The Man Who Knew: The Life and Times of Alan Greenspan — Twenty-two: IRRATIONAL EXUBERANCE

1. 1. In 1995, Greenspan approved a $1 million refurbishment of the Fed boardroom in under 30 seconds, showing his minimal engagement with administrative details.
2. 2. Greenspan joked that the refurbished boardroom had hidden buttons to drop members through the floor into a shark pool, highlighting his dominant control over the FOMC.
3. 3. By August 1995, Greenspan presided over 18 consecutive quarters of growth, with unemployment at 5.7% and core inflation under 3%, boosting his prestige.
4. 4. Greenspan blocked Clinton's choice of Felix Rohatyn for Fed vice chairman, demonstrating his political power over the White House.
5. 5. In July 1996, the FOMC informally adopted a 2% inflation target, though Greenspan insisted it remain secret to preserve flexibility.
6. 6. Greenspan resolved the productivity paradox in September 1996 by arguing that service-sector productivity was understated, preventing a premature rate hike.
7. 7. Lawrence Lindsey warned that Greenspan's refusal to raise rates could fuel a stock market bubble, but Greenspan prioritized inflation control over asset prices.
8. 8. Greenspan's 'irrational exuberance' speech in December 1996 caused a brief market drop, but the recovery showed investors doubted the Fed would act.
9. 9. Greenspan's reluctance to confront bubbles stemmed from the global inflation-targeting consensus and his personal aversion to forceful action.
10. 10. Greenspan proposed to Andrea Mitchell on Christmas Day 1996, finally marrying at age 70 after a long relationship.