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- Alan Greenspan's 18-year tenure as Federal Reserve chairman was widely regarded as exceptionally successful. He presided over unprecedented economic growth, federal budget surpluses and a booming stock market. He also received widespread praise for guiding the American economy through the shock of September 11, 2001.
- Greenspan's reputation came under serious criticism during the housing and subprime lending crisis. His memoir, The Age of Turbulence, was published as critics questioned whether his policies and regulatory decisions had helped create the conditions for the crisis.
- Greenspan admitted that he had underestimated the scale of abusive subprime mortgage lending. He acknowledged knowing that questionable lending practices existed but said he did not understand their significance until very late in 2005 and 2006.
- The interviewer challenged Greenspan's failure to use his public influence to warn Americans about questionable mortgage practices. She pointed out that he possessed an enormous public platform and that people listened to him. Despite this influence, he had not publicly raised an effective warning about the emerging problem.
- Subprime mortgage lending had expanded to millions of homebuyers and property speculators, including people with poor credit histories. Banks and mortgage companies offered complicated mortgages with interest-rate adjustments that contributed to record defaults. Some lending practices were fraudulent.
- Former Federal Reserve governor Ed Gramlich had reportedly identified the problem earlier and proposed investigating questionable mortgage lending. The interviewer confronted Greenspan with Gramlich's claim that he had proposed a Federal Reserve examination and that Greenspan had rejected it.
- Greenspan defended rejecting Gramlich's proposal by arguing that the Federal Reserve was not capable of carrying out the suggested intervention. He also argued that banking regulators found these practices difficult to address and maintained that there was little to investigate, even though he acknowledged that such practices were increasing.
- The housing crisis had already caused substantial damage to American families. The interviewer cited approximately one million families who had lost their homes, with many more potentially facing foreclosure. Greenspan insisted that there was little he could have done to prevent falling home prices.
- Some economists blamed Greenspan for helping create the housing bubble and subsequent credit crunch. Their central criticism was that he had maintained interest rates at historically low levels for approximately three years while the housing market was overheating.
- The Federal Reserve had made 13 interest-rate cuts during the period of exceptionally low rates. Critics argued that this prolonged cheap borrowing and encouraged the expansion of the housing bubble.
- Greenspan defended the low-interest-rate policy as necessary to restore the American banking system after financial disruption. He said the Federal Reserve needed to unfreeze banking activity so the broader economy could function, which required keeping interest rates modestly low.
- Greenspan rejected criticism from former Federal Reserve colleagues that rates had remained too low for too long. He maintained that those colleagues were mistaken.
- The Federal Reserve began raising interest rates in June 2004 and continued increasing them at every meeting until Greenspan left office. He used this record to defend his management of monetary policy, although critics argued that the tightening began too late to prevent the housing bubble.
- Greenspan rejected the suggestion that he would necessarily have responded more aggressively than his successor, Ben Bernanke. Investors believed Greenspan would have injected liquidity into the financial system earlier, more rapidly and more dramatically.
- Greenspan argued that the economic conditions facing Bernanke were fundamentally different from those during his own chairmanship. Inflation had been easing when Greenspan previously lowered rates, allowing him to act without the same concern about creating additional inflationary pressure. He said the current environment did not offer that freedom.
- Greenspan explicitly praised Bernanke's handling of the crisis. When asked whether he disagreed with his successor's decisions, he said Bernanke was doing an excellent job.
- Greenspan dismissed appeals from Ford and Chrysler executives for Federal Reserve interest-rate reductions. Rather than supporting their demands for cheaper financing, he suggested that the automobile companies should concentrate on producing better cars and selling them to customers.
- Greenspan retired in 2006 at the age of 79, after an extended period of extraordinary public prestige. He had guided the economy through the September 11 shock and presided over an unprecedented ten-year stretch without a recession. At retirement, he was widely treated as almost infallible.
- Greenspan refused to disclose how he personally invested his money after leaving government. Asked whether he invested in real estate or the stock market, he declined to answer, saying these were questions he had anticipated but would not discuss.
- The interviewer raised reports that Greenspan had received an $8 million advance for his memoir. Rather than directly discussing the reported payment, he responded to questions about preferred payment currencies by explaining that currency could be converted through foreign-exchange markets.
- Greenspan disclosed that he diversified his personal assets across different currencies. He would not identify the currencies he held, even when pressed about whether he maintained investments in several denominations.
- Greenspan described The Age of Turbulence as a personal examination of himself. The interviewer noted that the book was unusually conversational and revealing compared with his traditionally guarded public persona.
- Greenspan wrote approximately 80% of his memoir in the bathtub. He confirmed this unusual writing arrangement during the interview.
- His memoir openly discussed his relationship with NBC journalist Andrea Mitchell, who was 21 years younger than him. Greenspan used the story to poke fun at himself and his unconventional approach to romance.
- Greenspan and Mitchell's first date took place in 1984. After dinner, he invited her to his apartment to show her an essay he had written about monopolies and the Sherman Antitrust Act of 1890, rather than offering conventional romantic entertainment.
- Greenspan and Mitchell dated for 13 years before marrying. He said he had hinted at proposing several times, but Mitchell joked that his indirect, highly technical way of communicating made it difficult to recognize that he was actually proposing.
- Their honeymoon involved attending an international monetary conference. The choice illustrated how closely Greenspan's personal interests and professional life were intertwined.
- Greenspan's fascination with statistics and technical information began during his childhood in Depression-era New York City. He collected railroad timetables, learned Morse code and memorized baseball statistics.
- His first major ambition was to become a professional baseball player. He said he had been able to hit curveballs when he was 12 or younger and retained his interest in baseball throughout his life.
- Greenspan continued to complete baseball scorecards personally. During a visit to a Washington baseball game, he demonstrated the practice. Spectators recognized him, and some lined up to obtain his autograph on dollar bills.
- Greenspan's popularity extended beyond financial circles. One baseball spectator told the interviewer that without Greenspan, he would not have a house, illustrating the public gratitude that had accompanied the chairman's association with economic growth and rising wealth.
- Before becoming an economist, Greenspan seriously considered a career as a professional musician. He was a sufficiently accomplished saxophonist in high school to be hired by the Henry Jerome Orchestra instead of immediately proceeding to college.
- At approximately 17, Greenspan travelled around the country playing bebop jazz with the Henry Jerome Orchestra. While other band members drank alcohol and smoked marijuana between performances, he preferred reading books about the British stock market.
- Greenspan became the unofficial accountant for his fellow musicians. He confirmed that he prepared the other orchestra members' income-tax returns while they were travelling and performing.
- Greenspan eventually established his own economic forecasting business in New York during the 1950s. This marked his transition from his early ambitions in baseball and music into professional economics.
- Greenspan became friends with philosopher Ayn Rand during his early economic career. She personally gave him a copy of Atlas Shrugged when it was newly published, and he recalled reading it while the book was still warm.
- Rand advocated unfettered, largely unregulated capitalism, and Greenspan became one of her most prominent intellectual disciples. His later appointment as America's leading banking regulator created an apparent contradiction between his philosophical associations and his responsibility for overseeing financial institutions.
- Ayn Rand nicknamed Greenspan 'The Undertaker' because she thought he radiated gloom. She also considered him excessively interested in social advancement and approval from influential people.
- Greenspan admitted that Rand's criticism of his social ambition had some truth. He argued that the desire for other people's approval was inherent in human nature and that social climbing was one expression of that desire. He joked that practically nobody could claim innocence.
- Greenspan's memoir broke years of relative silence about the six American presidents he had known and worked with. He offered personal assessments of Richard Nixon, Gerald Ford, Ronald Reagan, George H. W. Bush, Bill Clinton and George W. Bush.
- Greenspan described Richard Nixon as extraordinarily profane. He recalled that Nixon could use more four-letter words within the first 30 seconds of a meeting than Greenspan had heard during his time in the music business.
- Greenspan believed there were two sides to Nixon's personality. His memoir also described Nixon as anti-Semitic and prejudiced against Italians, Greeks and Slovaks. The interviewer joked that it was difficult to identify anyone Nixon actually supported.
- Greenspan regarded Gerald Ford as an extraordinary human being despite considering him intellectually less impressive than the other presidents. He described Ford as the most normal president he had encountered.
- Greenspan particularly admired Ford's ethical judgment. He recalled discussions in which Ford was prepared to set aside certain facts and concentrate on doing what was right for the economy. Greenspan considered this ethical foundation an important presidential quality.
- Greenspan described Ronald Reagan as possessing an unusual form of intelligence. He believed Reagan used that intelligence to improve America's image of itself rather than necessarily demonstrating conventional analytical ability.
- Greenspan had a deeply strained relationship with the first President George Bush. His memoir described their relationship as terrible, partly because Bush publicly pressured the Federal Reserve to reduce interest rates.
- Greenspan considered public presidential pressure on Federal Reserve interest-rate decisions improper. He argued that the Federal Reserve's statutory independence existed for a specific purpose and that publicly demanding monetary-policy changes contradicted the spirit of the law.
- George H. W. Bush later blamed Greenspan for his defeat in the 1992 presidential election to Bill Clinton. This added to the history of tension between the two men.
- Greenspan considered Bill Clinton the smartest president he had worked with. Although Greenspan identified politically as a Republican, he acknowledged that Clinton was an extraordinarily effective president.
- Greenspan said he got along better with Clinton than with any of the other presidents. Clinton described their relationship as that of an unusual pair, calling them the 'odd couple'.
- Greenspan considered Hillary Clinton very intelligent and unquestionably capable of becoming president. However, when asked whether she was the best person for the position, he declined to endorse her and said his political tendency would be to vote Republican.
- Greenspan developed an unusually close working relationship with Bill Clinton and his economic team. He visited the White House as frequently as once a month, a level of access that the interviewer noted was unusual compared with previous Federal Reserve chairmen.
- Greenspan acknowledged acting as an economic consultant to the Clinton administration. When challenged about whether this compromised the appearance of Federal Reserve independence, he defended the arrangement by saying that the Federal Reserve and the administration were part of the same government, not opposing institutions.
- Greenspan openly acknowledged that he hoped his private advice influenced government policy. When the interviewer pointed out that he was influencing administration decisions, he replied that he hoped he was.
- Greenspan's public communication style became known as 'Fedspeak'. During congressional hearings, he frequently used complicated, ambiguous language when answering questions about interest rates and monetary policy.
- Greenspan admitted that his deliberately complicated language was sometimes designed to sound like an answer without actually answering the question. He described the technique as a form of 'syntax destruction'.
- Greenspan deliberately worked on making his public statements difficult to interpret. When shown a recording of one of his congressional appearances, he acknowledged that he had refined the technique.
- His ambiguous statements frequently produced contradictory newspaper coverage. Two newspapers could publish opposing headlines about what Greenspan had said during the same congressional hearing. He considered this evidence that his communication strategy had succeeded.
- Greenspan became known as 'Saint Alan' during the prosperous Clinton years. The booming economy, federal budget surpluses and rising financial markets generated enormous public admiration, with much of the credit directed toward the Federal Reserve chairman.
- Greenspan became a celebrity figure among ordinary Americans and investors. People reportedly approached him in the street to thank him for the growth in their retirement accounts, particularly their 401(k) investments.
- Wall Street strongly supported Greenspan because financial-market profits increased during his chairmanship. Investors nicknamed him 'Easy Al' because he had a reputation for cutting interest rates and making money cheaper whenever financial markets weakened.
- Greenspan's relationship with the George W. Bush administration became controversial over federal tax reductions. His testimony before Congress was interpreted by many newspapers and political observers as an endorsement of the administration's substantial tax cuts.
- Greenspan had previously argued that federal budget surpluses should be used to strengthen Social Security and Medicare. However, he later came to support a tax reduction because he believed that, without one, the projected surplus could become excessively large.
- Greenspan argued that a sufficiently large surplus could remain even after Congress allocated money to other priorities. The interviewer questioned why he had not expected lawmakers to spend the additional funds on education, infrastructure and other public programmes.
- Greenspan denied explicitly endorsing the Bush administration's particular tax-cut legislation. He maintained that the administration had interpreted his testimony as support, but said he had never directly stated that he favoured the Bush tax cut.
- Greenspan rejected allegations that he supported the tax cuts to gain political favour with the Bush administration. He said White House officials had never approached him about the matter and insisted that he had simply expressed his genuine economic views.
- Greenspan stood by his congressional testimony even after seeing the consequences of the tax reductions. Asked whether he would change anything knowing what happened afterward, he said he would not change a word.
- The projected federal budget surplus eventually disappeared and substantial deficits returned. Greenspan said he had proposed that the Bush administration adjust and reduce the tax cuts if the fiscal situation changed, but those recommendations were not implemented.
- The Bush administration continued pursuing its original campaign economic policies despite the deterioration in the federal budget outlook. Greenspan said the administration maintained its original proposals even after the assumptions supporting them, particularly the expectation of a very large surplus, had changed.
- Greenspan ultimately described the administration's failure to adjust its policies as wrong. Although the interviewer called the approach rigid, he agreed that the policies had been wrong.
- Greenspan was particularly disappointed in former friend Dick Cheney. He believed Cheney had shown considerably less interest in restraining government spending than Greenspan expected.
- Greenspan disagreed with Cheney's public position that federal deficits did not matter. He explicitly said Cheney was mistaken.
- After leaving government, Greenspan established an economic forecasting company called Greenspan Associates. He described this as his first time outside government in approximately 20 years and returned to his earlier professional role as an independent economic forecaster.
- Greenspan predicted that the immediate financial-market panic would eventually subside. He believed the American economy retained underlying strength and that the international economy was also holding up despite the extraordinary credit problems.
- Greenspan identified the flattening of American home prices as the original trigger of the financial crisis. He warned that the housing-price decline was only beginning and expected property prices to fall further.
- Greenspan acknowledged that falling housing prices were already spreading into employment and related industries. The damage extended beyond real estate to businesses selling appliances and furniture, demonstrating how a housing downturn could affect a much wider part of the economy.
- Despite the worsening housing situation, Greenspan did not expect the credit crunch to develop into a deeper economic collapse. He believed the United States and other economies possessed sufficient underlying strength to withstand the immediate disruption.
- Greenspan viewed the credit crunch as a temporary human-behaviour phenomenon. He predicted that the panic would pass, the economic fever would break and investor confidence and market euphoria would eventually return.
- Greenspan distinguished the immediate credit crisis from what he considered the more serious long-term economic threat. He believed the re-emergence of inflation would become America's greater problem over time.
- Greenspan's long-term economic outlook was considerably more pessimistic than his short-term assessment of the credit crisis. He expected inflation and interest rates to rise and acknowledged that his memoir contained a deliberately gloomy assessment of the economic future.
- Greenspan's public comments continued to influence financial markets after his retirement. In February, he predicted a one-in-three chance of a recession that year, causing market anxiety and forcing current Federal Reserve chairman Ben Bernanke to make efforts to calm investors.
- Greenspan's recession prediction raised questions about whether a former Federal Reserve chairman should publicly comment on economic developments. The interviewer argued that his statements carried unusual influence and could affect markets and complicate the work of his successor.
- Greenspan rejected the suggestion that he should remain silent about economic developments because of his former position. He argued that forecasting recessions, inflation and global economic conditions was essential to continuing his professional career.
- Greenspan maintained that his public comments were about broader economic conditions rather than Federal Reserve monetary policy. He therefore saw no reason to restrict his professional commentary.
- Greenspan disclosed that he had faced a one-year restriction on lobbying the Federal Reserve after leaving office. He said he had never lobbied the institution before and had not done so afterward.
- Greenspan rejected the idea of extending post-government restrictions to his public economic commentary. He said there was no prohibition on speaking and saw no reason to impose a voluntary restriction on himself.
- Greenspan continued to spend his leisure time studying government economic reports. His morning routine included reading the Bureau of Labor Statistics' productivity and cost publications over coffee.
- Greenspan's fascination with economic statistics extended to extremely specific technical details. He described examining the protein content of hard red winter wheat because differences in that measurement affected commodity prices.
- Greenspan specifically followed the price differences between Kansas City and Chicago. He found the relationship between wheat quality, regional pricing and economic data genuinely enjoyable, describing this kind of technical investigation as almost romantic.
- Greenspan's retirement did not diminish his underlying intellectual habits. Despite leaving the Federal Reserve, establishing a private forecasting firm and receiving considerable criticism over the financial crisis, he remained deeply interested in statistics, market behaviour and detailed economic information.
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