Alan Greenspan, the high priest of American capitalism who presided over two decades of economic boom, bust, and everything in between, has died at 100. The man who whispered in the ear of every president from Ford to Obama is now silent. His legacy? A mess of contradictions.
He was the 'Maestro,' a term coined by Bob Woodward. The man who could move markets with a single syllable. A pause in a speech could send the Dow into a tailspin. His grip on the levers of the US economy was absolute. But what did he leave us?
Let's be clear. Greenspan was a creature of his time. A devotee of Ayn Rand, a believer in the unfettered market. He championed deregulation. He pushed for lower taxes. He argued that financial innovation would spread risk, not concentrate it. He was wrong. Spectacularly wrong.
The 2008 crash was his legacy. The housing bubble, the subprime mortgage crisis, the collapse of Lehman Brothers. All of it happened on his watch as Fed Chairman. He had the tools to stop it. He chose not to. He believed the market knew best. It didn't.
And yet, you cannot ignore his impact. He shaped the global economy for a generation. The 'Greenspan Put' became legend: the idea that the Fed would always step in to rescue markets. It encouraged risk-taking. It inflated bubbles. It sowed the seeds of the next crisis.
His critics will say he was a one-trick pony. Low interest rates, deregulation, and a prayer. His supporters will point to the Great Moderation: the long period of stable growth and low inflation in the 1990s and early 2000s. He got the credit for that. But who gets the blame for the crash?
Inside the Beltway, the reaction will be muted. The current occupants of the Fed and Treasury will issue statements. They will praise his service. They will mention his 18-year tenure as Fed Chairman. They will gloss over the rest. That's the game.
But the game has changed. The era of central bank omnipotence is over. The playbook Greenspan wrote is being torn up. His successors, Bernanke, Yellen, Powell, have been forced to innovate. Quantitative easing, forward guidance, yield curve control. Greenspan wouldn't recognise his old job.
So what is his final score? He was a man who believed in the power of markets. He was a man who put his faith in numbers, models, and the wisdom of bankers. It was a faith misplaced. The numbers lied. The models failed. The bankers ran wild.
He was a titan. But titans fall. And when they do, the ground shakes.
Today, the ground shakes. The Maestro is silent. Finis.
