Challenges in the Life of Alan Greenspan in a Detailed Timeline

Resilience and perseverance in the journey of Alan Greenspan. A timeline of obstacles and growth.

Alan Greenspan is an American economist notable for serving as the 13th chairman of the Federal Reserve from 1987 to 2006. Following his tenure at the Federal Reserve, he transitioned to private consulting through Greenspan Associates LLC, providing economic advice to firms.

Sections (5)

Full Timeline Early Life & Education Career & Achievements Challenges & Struggles Controversies & Scandals

September 11, 2001: Federal Funds Rate Reduction

On September 11, 2001, the Federal Open Market Committee voted to reduce the federal funds rate from 3.5% to 3.0% in response to the attacks.

2001: Criticism for Supporting Bush's Tax Cut Plan

In 2001, Alan Greenspan received criticism for supporting President George W. Bush's tax cut plan.

2002: Federal Funds Rate Dropped After Scandals

In 2002, following accounting scandals, the Federal Reserve dropped the federal funds rate from 1.25% to 1.00%, which Greenspan stated would lead to a surge in home sales and refinancing.

2004: Interest Rate Reduction

In 2004 Alan Greenspan lowered interest rates to 1%, enabling banks to borrow money for free, adjusted for inflation, which lead to lending to unfit borrowers.

2004: Businessweek Analysis of Fed's Role in Housing Bubble

In 2004, Businessweek analysts argued that the Federal Reserve-engineered decline in rates inflated the housing bubble and that many recent buyers were exposed to rising rates because they were taking advantage of the lower rates available from adjustable-rate mortgages.

March 2005: Criticism for Supporting Bush's Social Security Plan

In March 2005, Alan Greenspan was attacked as "one of the biggest political hacks we have in Washington" by then-Democratic Senate Minority Leader Harry Reid for supporting President George W. Bush's plan to partially privatize Social Security.

2005: Late Realization of the Bubble

In 2005, Alan Greenspan noted he didn't realize the housing market bubble until very late in 2005.

2006: Late Realization of the Bubble

In 2006, Alan Greenspan noted he didn't realize the housing market bubble until very late in 2006.

March 2007: Subprime Mortgage Industry Collapse

In March 2007, the subprime mortgage industry collapsed, leading to bankruptcy filings by many of the largest lenders due to spiraling foreclosure rates. This contributed to criticism of Greenspan's role in the rise of the housing bubble.

2007: Housing Market Bubble Statement

In 2007, Alan Greenspan stated that there was a bubble in the U.S. housing market, warning of "large double-digit declines" in home values.

2007: Paulson & Co. Foresaw Collapse of Sub-Prime Housing Market

In 2007, Paulson & Co. foresaw the collapse of the sub-prime housing market and hired Goldman Sachs to package their sub-prime holdings into derivatives and sell them. Some economic commentators blamed this collapse on Alan Greenspan's policies while at the Fed.

March 2008: Article on the 2008 Financial Crisis

In March 2008, Alan Greenspan wrote an article for the Financial Times' Economists' Forum, stating that the 2008 financial crisis in the United States is likely to be judged as the most wrenching since the end of World War II. He argued for market flexibility and open competition.

September 2008: Stiglitz's Criticism of Greenspan's Regulation Beliefs

In September 2008, Joseph Stiglitz stated that Greenspan "didn't really believe in regulation" and called for self-regulation, which he termed an oxymoron.

October 15, 2008: Analysis of Greenspan's Opposition to Derivatives Regulation

On October 15, 2008, The Washington Post published an article analyzing the origins of the economic crisis, claiming that Alan Greenspan vehemently opposed any regulation of derivatives and actively sought to undermine the office of the Commodity Futures Trading Commission.

October 23, 2008: Congressional Hearing Admission

On October 23, 2008, during a congressional hearing, Alan Greenspan admitted that his free-market ideology, which shunned certain regulations, was flawed. He clarified his stance on laissez-faire capitalism, asserting that in a democratic society, there could be no better alternative and that the errors stemmed from the application of competitive markets.

2008: Frustration over ARM Criticism

In 2008, Alan Greenspan expressed frustration that his February 23 speech was used to criticize him on ARMs and the subprime mortgage crisis. He stated he had made countervailing comments eight days after it that praised traditional fixed-rate mortgages and suggested lenders should offer a greater variety of mortgage product alternatives.

2008: Cited as Responsible for Financial Crisis

In 2008, Alan Greenspan was cited as one of the persons responsible for the 2008 financial crisis in the documentary film "Inside Job", and he was also named in Time magazine as one of the "25 People to Blame for the Financial Crisis".

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2009: Reich's Criticism of Greenspan's Contribution to the Housing Bubble

In 2009, Robert Reich wrote that Greenspan's worst move was to contribute to the giant housing bubble and the worst worldwide crash since the Great Depression, by lowering interest rates to 1% in 2004 and refusing government oversight of lending institutions.

October 2011: Chomsky's Criticism of Greenspan's Testimony

In October 2011, Noam Chomsky criticized Alan Greenspan's February 1997 testimony to the U.S. Senate as an example of the self-serving attitudes of the so-called 1%, where Greenspan stated that growing worker insecurity promotes long-term investment by keeping inflation low.