Editing Alan Greenspan (section)

===Chairman of the Federal Reserve===
{|class="toccolours" style="float: right; margin-left: 0.50em; margin-right: 1.5em; font-size: 85%; background:#c6dbf7; color:black; width:25em; max-width: 40%;" cellspacing="5"
|style="text-align: left;"|What I've learned at the Federal Reserve is a new language which is called "[[Fedspeak|Fed-speak]]". You soon learn to mumble with great incoherence.
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|style="text-align: left;"|— Alan Greenspan<ref name="BessettePitney2010">{{cite book |last1=Bessette |first1=Joseph M. |last2=Pitney |first2=John J. Jr. |title=American Government and Politics: Deliberation, Democracy and Citizenship |year=2011 |location=Boston |publisher=Cengage Learning |isbn=978-0-534-53684-8 |page=[https://books.google.com/books?id=8uu8cevL2iUC&pg=PA578 578]}}</ref>
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[[File:Mvc-017x.jpg|left|thumb|Alan Greenspan in 2005]]
On June 2, 1987, President [[Ronald Reagan]] nominated Greenspan as a successor to [[Paul Volcker]], as chairman of the Board of Governors of the Federal Reserve, and the [[United States Senate|Senate]] confirmed him on August 11, 1987.<ref>{{cite book |author=United States Senate Committee on Banking, Housing, and Urban Affairs |title=Nomination of Alan Greenspan: Hearing Before the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundredth Congress, First Session, July 21, 1987 |date=July 21, 1987 |publisher=US Government Printing Office |url=https://fraser.stlouisfed.org/title/279}}</ref> Investor, author and commentator [[Jim Rogers]] has said that Greenspan lobbied to get this chairmanship.<ref>{{cite book |first=Jim |last=Rogers |author-link=Jim Rogers |title=Adventure Capitalist: The Ultimate Road Trip |location=New York |publisher=Random House |year=2004 |isbn=978-0-375-50912-4 |url=https://archive.org/details/ultimateinvestor00jimr}}</ref>

Two months after his confirmation, Greenspan said immediately following the [[Black Monday (1987)|1987 stock market crash]] that the Fed "affirmed today its readiness to serve as a source of liquidity to support the economic and financial system".<ref>{{cite report |url=http://www.federalreserve.gov/Pubs/feds/2007/200713/200713pap.pdf |title=A Brief History of the 1987 Stock Market Crash with a Discussion of the Federal Reserve Response |first=Mark |last=Carlson |location=Washington, D.C. |publisher=[[Federal Reserve Board]] |date=November 2006}}</ref><ref>{{cite magazine |url=https://www.forbes.com/2008/07/01/fed-bernanke-greenspan-oped-cx_jt_0702dollar.html |title=In 2008, Shades of October 1987 |first=John |last=Tamny |magazine=Forbes |date=July 2, 2008 |access-date=June 22, 2009 |archive-url=https://web.archive.org/web/20090611231632/http://www.forbes.com/2008/07/01/fed-bernanke-greenspan-oped-cx_jt_0702dollar.html |archive-date=June 11, 2009 |url-status=live}}</ref><ref>{{cite news |url=http://news.bbc.co.uk/2/hi/business/1538304.stm |title=Central Banks Promise Support |work=[[BBC News]] |date=September 12, 2001 |access-date=June 22, 2009}}</ref> Although the Federal Reserve followed its announcement with monetary policy actions, which became known as the [[Greenspan put]], [[George H.&nbsp;W. Bush]] attributed his re-election loss to a sluggish response. Democratic president [[Bill Clinton]] reappointed Greenspan, and consulted him on economic matters. Greenspan lent support to Clinton's 1993 deficit reduction program.<ref>{{cite news |url=https://www.washingtonpost.com/wp-dyn/content/article/2006/01/26/AR2006012602123_3.html |title=Chairman Moved a Nation |newspaper=The Washington Post |first=Nell |last=Henderson |date=January 27, 2006}}</ref> Greenspan was fundamentally a [[monetarist]] and [[Austrian Economist]] in orientation on the economy,<ref>{{cite book |last= Maybury|first=Richard|author-link= Richard J. Maybury|title= Whatever Happened to Penny Candy?|year=2004 |url= |location= |publisher= Bluestocking Press|page= 15|isbn=0-942617-52-5|edition= 5th}}</ref> and his monetary policy decisions largely followed standard [[Taylor rule]] prescriptions (see Taylor 1993 and 1999). Greenspan also played a key role in organizing the U.S. bailout of Mexico during the 1994–1995 [[Mexican peso crisis]].<ref>{{cite web |url=http://conversationswithbillkristol.org/video/larry-summers/ |title=Larry Summers on Conversations with Bill Kristol |website=Conversations with Bill Kristol |access-date=September 9, 2019}}</ref>

In 2000, Greenspan raised interest rates several times; these actions were believed by many to have caused the bursting of the [[dot-com bubble]]. According to [[Nobel Memorial Prize in Economic Sciences|Nobel laureate]] [[Paul Krugman]], however, "he didn't raise interest rates to curb the market's enthusiasm; he didn't even seek to impose margin requirements on stock market investors. Instead, he waited until the bubble burst, as it did in 2000, then tried to clean up the mess afterward".<ref>{{cite book |first=Paul |last=Krugman |author-link=Paul Krugman |title=The Return of Depression Economics and the Crisis of 2008 |url=https://archive.org/details/returnofdepressi00krug |url-access=registration |publisher=W.W. Norton |year=2009 |isbn=978-0-393-33780-8 |page=[https://archive.org/details/returnofdepressi00krug/page/142 142]}}</ref> E. Ray Canterbery agrees with Krugman's criticism.<ref>{{cite book |first=E. Ray |last=Canterbery |title=The Global Great Recession |publisher=World Scientific |year=2013 |isbn=978-981-4322-76-8 |pages=123–135}}</ref>

In January 2001, Greenspan, in support of President Bush's proposed tax decrease, stated that the federal surplus could accommodate a significant tax cut while paying down the national debt.<ref>{{cite news |first=Richard W. |last=Stevenson |work=The New York Times |title=Down Into the Fray |date=January 27, 2001 |url=https://www.nytimes.com/2001/01/27/business/down-into-the-fray.html |access-date=January 7, 2013}}</ref>

In autumn 2001, as a decisive reaction to the [[September 11 attacks]] and various corporate scandals which undermined the economy, the Greenspan-led Federal Reserve initiated a series of interest cuts that brought down the [[federal funds rate]] to 1% in 2004. While presenting the [[Monetary Policy Report to the Congress|Federal Reserve's Monetary Policy Report]] in July 2002, he said that "It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously", and suggested that financial markets need to be more regulated.<ref>{{cite news |url=http://www.federalreserve.gov/boarddocs/hh/2002/july/testimony.htm |title=Testimony of Chairman Alan Greenspan |publisher= Federal Reserve Board | date=July 16, 2002 | access-date=July 13, 2011 |archive-url=https://web.archive.org/web/20110607103641/http://www.federalreserve.gov/boarddocs/hh/2002/july/testimony.htm |archive-date=June 7, 2011 |url-status=live}}</ref> His critics, led by [[Steve Forbes]], attributed the rapid rise in [[commodity]] prices and [[Gold as an investment|gold]] to Greenspan's loose monetary policy, which Forbes believed had caused excessive asset inflation and a weak dollar. By late 2004, the price of gold was higher than its 12-year moving average.

Greenspan advised senior members of the George W. Bush administration to depose [[Saddam Hussein]] for the sake of the oil markets.<ref name="The Wall Street Journal">{{cite news |url=https://blogs.wsj.com/economics/2007/09/17/qa-greenspan-on-bubbles-saddam-cheney-and-bernanke/ |title=Q&A: Greenspan on Bubbles, Saddam, Cheney and Bernanke |newspaper=The Wall Street Journal |date=September 17, 2007 |access-date=June 13, 2016}}</ref> He believed that even a moderate disruption to the flow of oil could translate into high oil prices,<ref name="The Washington Post">{{cite news |url = https://www.washingtonpost.com/wp-dyn/content/article/2007/09/16/AR2007091601287.html |title = Greenspan: Ouster Of Hussein Crucial For Oil Security|first1= Bob |last1=Woodward|newspaper=The Washington Post |date=September 17, 2007 |access-date= June 8, 2016}}</ref> which could lead to "chaos" in the global economy and bring the industrial world "to its knees".<ref name="Guardian US">{{cite news |last1=Adams |first1=Richard |title=Invasion of Iraq was driven by oil, says Greenspan |url=https://www.theguardian.com/world/2007/sep/17/iraq.oil |access-date=June 14, 2022 |work=Guardian US |publisher=Scott Trust Limited |date=September 16, 2007 |archive-url=https://web.archive.org/web/20130901002625/https://www.theguardian.com/world/2007/sep/17/iraq.oil |archive-date=September 1, 2013 |location=New York |quote=Mr Greenspan said it was clear to him that Saddam Hussein had wanted to control the Straits of Hormuz and so control Middle East oil shipments through the vital route out of the Gulf. He said that had Saddam been able to do that it would have been "devastating to the west"}}</ref><ref name="The Irish Times">{{cite news |url=https://www.irishtimes.com/news/greenspan-says-invasion-and-war-largely-about-oil-1.962612 |title=Greenspan Says Invasion and War 'Largely about Oil' |last  = Adams    |   first  = Richard |agency = Guardian Services
            |newspaper=The Irish Times |date=September 17, 2007 | archive-url  =  https://web.archive.org/web/20160625163129/https://www.irishtimes.com/news/greenspan-says-invasion-and-war-largely-about-oil-1.962612  | archive-date  = June 25, 2016 |access-date= June 14, 2022}}</ref> He feared that Saddam could seize control of the Straits of Hormuz and restrict the transport of oil through them. In a 2007 interview, he said, "people do not realize in this country, for example, how tenuous our ties to international energy are. That is, we on a daily basis require continuous flow. If that flow is shut off, it causes catastrophic effects in the industrial world. And it's that which made him [Saddam] far more important to get out than bin Laden."<ref name="The Huffington Post">{{cite news |url=http://new.www.huffingtonpost.com/david-fiderer/the-simple-arithmetic-of_b_100021.html |title=The Simple Arithmetic of John McCain's Bogus Claims of Energy Independence|work=The Huffington Post |date=May 5, 2008 | archive-url  =  https://web.archive.org/web/20160914234852/http://www.huffingtonpost.com/david-fiderer/the-simple-arithmetic-of_b_100021.html       |  archive-date =  September 14, 2016 |format = Blog     |last  =  Fiderer   |  first = David   |   quote = My friends, I will have an energy policy that we will be talking about, which will eliminate our dependence on oil from the Middle East that will prevent us from having ever to send our young men and women into conflict again in the Middle East |access-date=June 14, 2022}}</ref>

On May 18, 2004, Greenspan was nominated by President [[George W. Bush]] to serve for an unprecedented fifth term as chairman of the Federal Reserve. He was previously appointed to the post by Presidents Reagan, George H.&nbsp;W. Bush, and Bill Clinton.

In a May 2005 speech, Greenspan stated: "Two years ago at this conference I argued that the growing array of [[Derivative (finance)|derivatives]] and the related application of more-sophisticated methods for measuring and managing risks had been key factors underlying the remarkable resilience of the banking system, which had recently shrugged off severe shocks to the economy and the financial system. At the same time, I indicated some concerns about the risks associated with derivatives, including the risks posed by concentration in certain derivatives markets, notably the [[Over-the-counter (finance)|over-the-counter]] (OTC) markets for U.S. dollar interest rate options."<ref>{{cite web|url=http://www.federalreserve.gov/boarddocs/speeches/2005/20050505/default.htm |title=Risk Transfer and Financial Stability |  format =Remarks to the Federal Reserve Bank of Chicago's Forty-first Annual Conference on Bank Structure via satellite  | location = Washington DC |last = Greenspan   |  first = Alan    |publisher= Federal Reserve Board|  date=May 5, 2005 |access-date=May 24, 2010 |archive-url=https://web.archive.org/web/20100530104529/http://federalreserve.gov/boarddocs/speeches/2005/20050505/default.htm |archive-date=May 30, 2010 |url-status=live}}</ref>

Greenspan opposed [[China–United States relations#Economic relations|tariffs against the People's Republic of China]] for its refusal to [[Renminbi currency value|let the yuan rise]],<ref>{{cite news |url=https://www.foxnews.com/story/greenspan-warns-against-anti-china-protectionism |title=Greenspan Warns Against Anti-China Protectionism | agency = Reuters and the Associated Press contributed to this report. |work=[[Fox News]] |date=June 23, 2005 |access-date=January 7, 2013 |archive-url=https://web.archive.org/web/20140118142631/http://www.foxnews.com/story/2005/06/23/greenspan-warns-against-anti-china-protectionism/ | location = Washington DC |archive-date=January 18, 2014 |url-status=live}}</ref> suggesting instead that any American workers displaced by [[Chinese trade]] could be compensated through unemployment insurance and retraining programs.<ref>{{cite news |url=https://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJPievhWVrmY |title=Greenspan Says Tariffs on China Would Hurt U.S. Economy, Jobs | first1 =Craig | last1 =Torres | author-link =Craig Torres |first2=Alison |last2=Kodjak|author2-link=Alison Kodjak |work=[[Bloomberg News]] |date=June 23, 2005 |access-date=January 7, 2013 |url-status=dead |archive-url=https://web.archive.org/web/20140107234243/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJPievhWVrmY |archive-date=January 7, 2014}}</ref>

Greenspan's term as a member of the board ended on January 31, 2006, and [[Ben Bernanke]] was confirmed as his successor.

As chairman of the board, Greenspan did not give any broadcast interviews from 1987 through 2005.<ref name="Davies">{{cite news |url=http://news.bbc.co.uk/2/hi/business/4562488.stm |work=BBC News |title=Deficits Could Harm Greenspan's Legacy |last=Davies |first=Sir Howard |author-link=Howard Davies (economist) |date=December 29, 2005 |access-date=May 17, 2011}}</ref>