Federal Reserve: Once the most powerful monetary politician: Alan Greenspan is dead

He stood for American capitalism

For 18 years he was at the head of the central bank, which also plays an important role for Germany and worldwide. He moved to the head of the powerful Board of Governors in 1987 and remained there until 2006. He worked at a time of continued prosperity and became a symbol of American-style capitalism. Greenspan kept inflation low during his time as Fed chairman. The New York Times wrote that at the height of his fame, his face behind the thick glasses was as familiar as that of a movie star. At the same time, he was someone who often expressed himself cryptically in public.

It was an eventful political time through which Greenspan led the central bank: between the end of the Cold War, the terrorist attack on the World Trade Center in New York and the beginning of the digital age. Above all, many people still give Greenspan credit for counteracting the economic difficulties resulting from the attack on the World Trade Center with his monetary policy.

Greenspan kept interest rates comparatively low

The New York Times writes about Greenspan’s work that the economist tended to keep interest rates lower than traditional economic models suggested. He seemed to have been right with this approach for a large part of his time in office – especially in the late 1990s.

Greenspan steered the money house through presidencies of both Democrats and Republicans in the White House. The New York Times describes him as a master of the political power game. He gained experience as a political advisor in Richard Nixon’s presidential campaign in 1968.

Fed: Greenspan strengthened the House’s credibility

The Fed emphasizes Greenspan’s strict analytical discipline in monetary policy decisions. This contributed significantly to strengthening the credibility of the company. The Fed is currently in the headlines again and again because US President Donald Trump is putting pressure on the top of the central bank to lower interest rates as he wishes. The bank has so far resisted this pressure and acted independently.

Critics: Negligent deregulation of the financial sector

Greenspan’s work is not viewed entirely positively by everyone. His name also remains associated with the financial crisis of 2008. A negligent low interest rate policy and the deregulation of the financial sector paved the way for the crash, according to the accusation. Greenspan himself no longer had to clean up the mess, but rather his successors. He retired in 2006.

Greenspan, who grew up in New York as the son of a stockbroker, died as a result of Parkinson’s disease, according to journalist Andrea Mitchell, who works for the TV station NBC News and was married to the economist. It was said that he was honest enough to admit his own mistakes. Critics still see things differently today.