RIP Alan Greenspan: you were charming, powerful, and wrong | Robert Reich

Alan Greenspan has died at the age of 100. My students don’t recognize his name, but you probably do. When he was chair of the Federal Reserve – for more than 18 years, from 11 August 1987 to 31 January 2006 – he not only ran the US (and most of the world’s) economy but was also in many ways the most powerful person in the US. He maintained an iron grip over the Fed and almost singlehandedly decided on interest rates. But that was just the start of his power. He essentially fired George HW Bush by raising interest rates so high (ostensibly to ward off the inflation then threatening the economy) that the economy took a dive, and voters blamed Bush. This was enough to convince my old boss, Bill Clinton, to do exactly what Greenspan wanted – which was to reduce the federal budget deficit and thereby destroy much of the agenda Clinton ran on (and I helped create). As I wrote in my memoir of those years, Locked in the Cabinet : “Greenspan has the most important grip in town: Bill’s balls, in the palm of his hand.” I don’t want to speak ill of anyone who has passed. Greenspan was an extremely charming, intelligent and thoughtful man. But the truth must be told: if any single person was responsible for the financial crisis of 2008, it was Greenspan. …