Alan Greenspan Summary

I decided to embark in reading a book about the life of Alan Greenspan by Bob Woodward published in 2000.

I was attracted by the title of the book, but especially by the designation of maestro, given by the author to Alan Greenspan, who served as the Chairman of the Federal Reserve from 1987 to 2006. To me, the title of maestro denotes a conductor of an orchestra, the one holding the baton marking the beat and indicating each compass of a work of music. It may also signify a master, a genius, an expert, a prodigy and many other distinguish labels. The visual of a conductor is appropriate under the context of the economy, and how marking the beat and giving appropriate and timely guidance may result in a coherent and harmonious piece of music.

1993 brought yet another President to the Whitehouse, Bill Clinton Greenspan saw a different style, a more open approach and a more agreeable partner. Perhaps with the new winds of change Greenspan provided a recipe for recovery. The Economy was not at his best. He proposed lower term rates, which would increase demand for new mortgages, refinancing and consumer loans. With a better economy, investor would get less return on bonds which will motivate them to invest in the stock market, all this to better the economic conditions. Conditions got better but and no major crisis disrupted the positive indicators. It is reported that by 1995 conditions were under control. The inflation was at a decent level and overall economic growth was slowing. At this point things were not let unchecked, which allowed for a better balance and control. However, internal pressures were forming among the ranks within the administration, and opposing views to Greenspan’s approach started to pressure the direction that has been established. For instance, White House staff Leon Panetta went publicly indicating that they needed more cooperation from the Feds in reducing the interest rates. Other voices indicated that the economy didn’t need any help that any obvious unbalance would fix on its own. I fond ironic through my reading that every time conditions were favorable the Feds and others grew suspicious. In reality, a good economic environment opened up opportunities to question practices and to prepare for future unseen conditions. During this time many believed that the economy could grow faster than 2 ½ percent per year as proposed by Greenspan. His views were challenged by a group of investors and businessmen who in close meeting with President Clinton expressed how things could be handled differently by manipulating factors to allow for a faster grow