The Man Who Knew: The Life and Times of Alan Greenspan — Twenty-six: “A VERY SURREAL ENVIRONMENT”

1. 1. The younger Bush set aside his father's grudge against Greenspan, acknowledging the Fed chairman's central role in American prosperity.
2. 2. Dick Cheney, a longtime Greenspan friend, was selected as vice president, and Greenspan supported his candidacy despite suspecting Cheney was scheming to nominate himself.
3. 3. Greenspan persuaded Paul O'Neill to accept the Treasury secretary position by appealing to his desire for lasting policy changes, such as Social Security reform.
4. 4. Greenspan and O'Neill devised a 'triggers' plan to make Bush's tax cut conditional on the budget surplus materializing, but the idea was never forcefully advocated.
5. 5. Cheney argued that a tax cut would revive the slowing economy, undermining the triggers plan.
6. 6. Greenspan endorsed Bush's tax cuts in congressional testimony, but his conditional support for triggers was ignored by the media, which reported a blanket endorsement.
7. 7. Greenspan passed up a chance to reiterate his support for triggers during Senate testimony, effectively endorsing the administration's position.
8. 8. Greenspan admitted to O'Neill that without triggers, the tax cut was irresponsible fiscal policy, but he did not insist publicly.
9. 9. The economy entered a recession in March 2001, the first since the previous Bush presidency, and Greenspan faced blame for both tactical and strategic errors.
10. 10. Greenspan aggressively cut rates by 2.5 percentage points from January to May 2001, a more forceful response than during the early 1990s recession.
11. 11. Greenspan blocked the White House's attempt to appoint Terry Jorde, a community banker, to the Fed board, asserting his control over appointments.
12. 12. On 9/11, the Fed's discount window lent over $37 billion to banks on the first day, nearly 200 times normal lending, averting a liquidity crisis.