The Cult of Greenspan

Much ink has been spilled over the personage of Fed chairman Alan Greenspan. Until now, we've avoided the subject, but a recent article by Dan Kennedy in the alt-weekly The Boston Phoenix caught our attention. Kennedy delivers an intelligent account of Greenspan's career, and some keen insights into what propels the impressive pop-culture status of the man many consider to be more powerful than the president.

Kennedy suggests that, from the start, Greenspan's good timing and smooth management have earned him the public's trust and admiration. When Greenspan became the Federal Reserve Board chairman during the 1987 stock market plunge he cajoled the 'large financial institutions to make sure the money supply kept flowing, [making] the crash little more than a slightly unpleasant memory,' Kennedy writes.

National Public Radio recently affirmed Greenspan's hero status, reporting that 'more people have heard of Greenspan than the lead singer for the boy group 'N Sync.' Even so, his reputation may be losing some of its luster as the economy continues to flounder.

During the Clinton administration, Greenspan maintained a largely hands-off approach to reducing the deficit. Now, because of the current carnage in Dot-Com land and the stock market woes, many of Greenspan's critics want to see him take more dramatic measures to improve the economy. However, Kennedy speculates that 'by refusing to cut interest rates as quickly as his critics would like, [Greenspan] may have set a goal of bringing stock prices in line with their true value, even if there's some short-term suffering in the process.'

Kennedy's article provides an enlighening view of Greenspan's long career, from his days in the 1950s as a professional jazz musician and member of libertarian icon Ayn Rand's inner circle, to his current status as 'central banker extraordinaire, media icon, and the world's most unlikely pop-culture hero.'
--Sara V. Buckwitz
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