It is worth notingthat, Alan Greenspan was born in 1926 in New York City. His fatherlike any father was a hardworking person and was a financial analystand stockbroker. As a result, Alan Greenspan inherited his father’straits, and studied economics, where he acquired a doctorate degreeon the same field in the year 1977. This paper seeks to outline anddiscuss the facts about Alan Greenspan major contributions to theeconomics. Additionally, it will analyze his personal opinions andreactions concerning him.
Alan Greenspan isone the people who was successful in early career, as he worked atWall Street while he was still a student in NYU. This is not a commonthing to many students that they can work while still in theuniversity. In the Wall Street, he was employed in the equityresearch department in the company’s Brown Brothers Harriman. Lateron, between 1955 and 1987, he worked in a consulting firm, known asTownsend-Greenspan Greenspan & Co, and afterward, he wasappointed in the Federal Reserve (Greenspan 25). It is worth notingthat, while working for Townsend-Greenspan Greenspan & Co, AlanGreenspan was among the individuals who made key decision, since hewas among the top level management. During this period, AlanGreenspan was a student, and this implies that he had early exposurein leadership and experience of economics due to the position he heldin these companies. This is an outstanding contribution from a youngindividual, since it implies that his future career will be brightdue to competent as well as the experience.
Apart from being aneconomist student, Alan Greenspan was also active in politics. He waselected as the chairman of President’s Council of EconomicAdvisers, which was under Gerald Ford (Jerry 1). In 1981 to 1983,when President Jimmy Carter was in power, he was given an opportunityto chair a meeting that was held in the National Commission,concerning the Social Security Reforms (Meltzer 36). This signifiesthat, he was not only concerned with issues of economy but also aninfluential leader in the politics. Being given the opportunity tochair a social security reform shows that he was an active individualin the politics, since he could make rational decisions regardingsecurity issues.
In 1987, he wasappointed as the chairman of Federal Reserve by President RonaldReagan. In his tenure as the chairman, he contributed greatly in themonetary policy, where he worked with both the republicans anddemocrats representatives. He advised the presidents about thecountry’s economy during this period up to 2006. Due to hisexperience and skills, he was also able to play a great role in thepolitical ideologies. In addition, as the chairman of FederalReserve, he made a significant improvement to the stock market. It isworth noting that, the size of stock markets increased tremendously,thus the government was able to correct more revenue from the profitmade by the investors. Between the year 1991 and 2000, the UnitedState economy grew further, due to Greenspan’s economiccontributions, which made him earn credit. It is worth noting that,Queen Elizabeth II accredited him with honorary degree in the year2000, due to his outstanding positive contributions to the UnitedState economy.
When the UnitedState economy expanded between the year 1991 and 2000, it impliesthat Alan Greenspan was able to control the money and the interestrates, such as fluctuations of financial market and among others. Itis worth noting that, assets like stocks and bond if controlledeffectively, they can contribute on government revenue, and thisimplies that, Alan Greenspan was competent on financial analysis.Working with President Reagan, Clinton and Bush shows that, he was acompetent person in his work that contributed greatly in the economyof the United States.
However, afterachieving credit on economy issues, Alan Greenspan was on other handassociated with financial crisis that was experienced in 2008. Thefinancial crisis was a result of mortgage loans that was given toindividuals in 2000 at lower rates, and they were unable to repay,thus resulting to bankruptcy. This led banks and insurance companiesto run out of funds, which resulted to financial crisis in 2008. Alot of borrowers did not have any collateral, yet they were given amortgage at a low rate, and when they failed to service the loans,banks were unable to recover their monies, since there was nosecurity. To hit the nail on the head, investors did not have themoney to buy those houses in order for the banks to recover theirmonies. In addition, since every loan has to be insured, theinsurance firms could not make compensation to overwhelming claims,as they were also running out of funds. It is worth noting that, someof the insurance firms as well as banks had to close up theiroperation as the crisis continued to hit harder in the year 2009.
Currently, theUnited State has recovered from the financial crisis, due topresident Obama’s financial reforms, but many people are stillrecovering from bankruptcy. It is worth noting that, apart fromGreenspan’s failure of reducing the federal discount window rate tothe commercial banks, which resulted to commercial banks lowering theinterest rates to their borrowers, there were some banks involved inthe collapse of the U.S economy. For example, Lehman Brothers waspracticing unethical business, which resulted to unprecedented lossand closure of the bank, after it was declared bankruptcy.
Personalopinion concerning Alan Greenspan
One of personalopinions towards Alan Greenspan is that he is confident and competentindividual in his work. For example, he was involved in politicalissues and still was a financial adviser. This implies that, wheneverhe would join politics, he would do it and attain the goalsstipulated just like how he improved the United States economy from1987 to 2006, though he was later criticized due to financial crisisthat resulted in 2008 (Jerry 1). As a child of a financial adviser,Alan Greenspan inherited the traits from his father, and thus, he wasan excellent economist. Exposure in early life leads to competent,and this is one of the contributions that lead to Alan Greenspan tobe among the best economist in United States.
The second personalopinion towards Alan Greenspan is that he believed in individualismand self interest. This is because he is among the individuals whowanted the United State to adopt capitalism. Capitalism is concernedwith individualism or the objectivism philosophy. The individualownership of property is self-interest, which individual associatewith working hard. Since Alan Greenspan worked from 1987 to 2006, itshows that he was concerned with individual ownership of property,and this is the reason why he encouraged free market economy. The aimof free market economy was to ensure that the individuals whoconducted business could gain as much as possible from the economy.As a result of free economy that was encouraged, a class of wealthyindividual was created, thereby creating a gap between the rich andthe poor individuals in United States. Personally, I do not like theidea of capitalism, as we will continue widening the gap between therich and poor. Instead, it will be wiser if we create a healthiereconomy, where the poor can gain as much as the rich, so that everycitizen in the United State, can become financial autonomous. Am surethis can trigger down the unemployment rate we are currentlyexperiencing as well as crimes in various cities across the U.S.
The third personalopinion is that Alan Greenspan was a double standard man. Forinstance, working with both the republicans and democrats indicatesthat he was a person who was concerned with the opportunity that wasreadily available. The ideological differences between the democratsand republicans did not hinder Alan Greenspan from collaborating withboth parties (Sicilia and Jeffrey 52). It is an indication that evenif he was a corrupt individual, he would carry the trend to bothparties, and thus, it would be very hard to expose him. Dealing withthe stocks and the bonds of a country as well as controlling itwithout fluctuating, it implies that one has the knowledge ofeconomics, and thus, it was important to carry regular audits, sothat any corruption issues could be noticed. Double standards shouldnot be applied in the government institutions, so that check andbalance is obtained, and thus, criticizing any idea that is goingagainst the will of the common citizens.
The next personalopinion towards Alan Greenspan is that he has leadership skills.Starting from the time he was in the university, he was selected asstudent leader and later chaired meeting with the government agentswhen still in the university. This implies that he had leadershipskills, though he was concerned with capitalism ideology, whichcaused the wide gap between the rich and the poor. When he wasappointed as the chairman of Federal Reserve from 1987 to 2006, hewas a competent leader who contributed greatly to the economy byintroducing measures as well as polices that stabilized the UnitedState economy (Jerry 1). The nation did not experience crisis duringhis tenure, since he had the mechanism that he used to ascertain thateverything was properly planned, and thus, attaining the goals asspecified. This indicates that he was a leader and competentindividual, willing to improve the economy of the United States.
When hiring anindividual, it is important to consider the education background. Forinstance, Alan Greenspan had a doctorate degree in economist, andthus, it indicates that he has the knowledge concerning the issuesthat deal with financial analysis in the country. Competence is thekey to the attainment of goals. Working under different regimes showsthat Alan Greenspan is a competent person, since he was able toconvince the Reagan Clinton and Bush regimes that he was competent inhis work by contributing positively to the economy. The governmentshould come up with strategy that would ensure that the economy ofthe country is not fluctuating, and thus, the prices of thecommodities cannot increase as the time goes. Double standards inpolitics, and in the issues to do with the economy, should not bepracticed based on the fact that it does allow check and balance inthe governance. The gap between the rich and the poor should bereduced to ensure that there is equal balance of wealth among thepeople.
Greenspan, Alan. The Age of Turbulence: Adventures in a New World.New York: Penguin, 2007. Print.
Jerry, S. 8 Surprising Facts About Alan Greenspan. November2015. Available fromhttp://www.newsmax.com/Finance/Money-Wire/Federal-Reserve-Greenspan-facts/2015/07/10/id/654457/
Meltzer, H. A History of the Federal Reserve. Chicago, Ill.: Uof Chicago, 2009. Print.
Sicilia, B., and Jeffrey L. The Greenspan Effect: Words That Movethe World`s Markets. New York: McGraw-Hill, 2000. Print.