Music man conducts economy

No matter which of the intellectual giants get to sleep in the White House, the President of the US economy will still be 74-year old Alan Greenspan, who recently began his fourth four-year term as head of the Federal Reserve Board.

Since he is arguably the most important individual in the world, it is worth trying to hang some sort of human scale on the man.

He was born in Upper Manhattan in 1926. That cannot have been great timing, since his father Herbert was a stockbroker. His childhood memories would have been of the great depression.

Greenspan’s first love was not economics, but music. He was accepted by the celebrated Julliard music school in New York, but soon dropped out, and spent a year on the road in the 1940s playing clarinet and saxophone with Henry Jerome’s jazz band.

At George Washington High School (also Henry Kissinger’s alma mater) he showed a talent for mathematics. He did not take his doctorate in economics until he was 41 and already launched on a highly successful Wall Street career.

Looking at him now, and droning interminably on at senate hearings, it would be hard to guess that Greenspan is clearly a man of considerable passion. He married young to his first wife, painter Joan Mitchell, and later fell under the spell of Russian expatriate novelist and cult figure Ayn Rand.

Something of a media groupie, he once dated Barbara Walters and he recently married attractive NBC news correspondent Andrea Mitchell. Still a keen tennis player, and eagerly sought on the Washington social circuit, he habitually rises at 6 am and spends an hour or so immersed in the bath tub, drafting speeches and peering through the steam at economic reports.

Greenspan took over at the Federal Reserve in 1987. He had only been in the job eight weeks before “Black Monday” October 19 when the US stock market dived 508 points, or 26 per cent in a single day. Greenspan, who was on a speaking trip to Dallas, jumped on the first plane north. The next morning, two hours before the opening bell, he issued a statement saying the Fed was ready to “serve as a source of liquidity to support the economic and financial system”. He then calmly engineered the pumping of billions of dollars into the banking system.

A global crisis was averted, as have a dozen more under Greenspan’s stewardship ,for which the salary is a miserly US$136,000 a year.

Some time in the opening months of 2001, he will review the gathering evidence of a slowdown in the US, allied with benign inflation and the bucket of ice water thrown over the NASDAQ exchange. He will not require any advice from number 1600 Pennsylvania Avenue in taking the first steps to trim interest rates and keep the economy sailing on course.

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