Fed Chairman Greenspan’s Quirky Past - ABC News
Economic FundamentalistI confess that Alan Greenspan startles me. President Nixon picked him to succeed outgoing Chairman Herbert Stein in the last throes of his administration Mr. Greenspan, meet Justice Field. His father, Herbert Greenspan, was a businessman who later became a stockbroker To help make ends meet, Rose took a job in the domestics department at. Alan Greenspan is an American economist who served as Chair of the Federal Reserve of the His father, Herbert Greenspan, was of Romanian Jewish descent, and his mother, Rose . quota is "far too small to meet the need" and saying that it protects U.S. workers from global competition, creating a "privileged elite".
Although Greenspan was initially a logical positivist he was converted to Rand's philosophy of Objectivism by her associate Nathaniel Branden. He became one of the members of Rand's inner circle, the Ayn Rand Collectivewho read Atlas Shrugged while it was being written. During the s and s Greenspan was a proponent of Objectivism, writing articles for Objectivist newsletters and contributing several essays for Rand's book Capitalism: The Unknown Ideal including an essay supporting the gold standard.
Greenspan and Rand remained friends until her death in When questioned in relation to this, however, he has said that in a democratic society individuals have to make compromises with each other over conflicting ideas of how money should be handled.
He said he himself had to make such compromises, because he believes that "we did extremely well" without a central bank and with a gold standard. He stated that the errors that were made stemmed not from the principle, but from the application of competitive markets in "assuming what the nature of risks would be". Ray Canterbery has chronicled Greenspan's relationship with Rand, and has concluded that the influence has had pernicious effects on Greenspan's monetary policy.
A few months after his recommendation, Greenspan began raising interest rates, in a series of rate hikes that would bring the funds rate to 5. InGreenspan expressed great frustration that the February 23 speech was used to criticize him on ARMs and the subprime mortgage crisisand stated that he had made countervailing comments eight days after it that praised traditional fixed-rate mortgages.
Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately.
These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early s. For these reasons, Greenspan has been criticized for his role in the rise of the housing bubble and the subsequent problems in the mortgage industry,   as well as "engineering" the housing bubble itself.
In Businessweek magazine analysts argued: That leaves them fully exposed to rising rates. In 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. Naturally, the banks wanted to borrow as much as they possibly could, then lend it out, earning nice profits. The situation screamed for government oversight of lending institutions, lest the banks lend to unfit borrowers. He excelled as a student, reading at a level ahead of his classmates and memorizing multiplication tables in a snap.
He adds that Alan was well behaved and polite even at an early age: He was a straight arrow right down the line. Small brought pragmatism to teaching mathematics, taking the students on some unusual field trips. As a left-hander, Greenspan was naturally called upon to play first base. He modeled himself after Dolph Camilli, a slugger for the Dodgers who played the same position. Although Washington Heights was Yankees territory, Greenspan's heart lay with their crosstown rivals in Brooklyn.
He even developed an extraordinarily complicated system for scoring ball games that he listened to on the radio, with intricate notations identifying the type of pitch thrown, the exact location to which the ball was hit, and so on. In the summertime, Greenspan spent many happy weekends at the Halpert family's beach house in the Rockaway section of Queens. We did it without using machinery or anything. We'd just walk along the beach looking. Then we'd go buy candy.
Just up the street from the Goldsmiths' apartment was the Audubon Theater, where Wesley often took Alan to the movies. This was the heyday of classic monster films starring Boris Karloff and Bela Lugosi. It was a defense of Franklin D. Roosevelt's New Deal, in which he argued that government programs could help spur the economy out of depression.
The book bore the following inscription from Herbert Greenspan to Alan Greenspan: Already, he was moving in a direction that would take him about as far from economics as one can get.
Both the Goldsmiths and Halperts were very musical families. She also worked some Yiddish songs into her repertoire, such as "Rozhinkes mit Mandlen" Raisins and Almonds. Claire grew up to be a professional singer, specializing in musical comedies. And then there was Uncle Mario, born Murray Toluchko.
A small, round man with a swarthy complexion, he wanted to pass for Italian and hoped to build a career in the opera. Silva wrote a play that actually appeared on Broadway, called Song of Love, about the composer Robert Schumann.
Surrounded by all this passion for music, young Alan had no alternative. He chose the clarinet as his instrument.
Herbert Greenspan - IMDb
From the time he was very young, Greenspan showed an idiosyncratic but highly developed sense of morality. During the mids, when he was just ten or eleven years old, he and his friend Bill Callejo founded a secret society called the Detective Scouts of Washington Heights. The two boys had a vague sense that something was amiss in the world, and they planned to do something about it. Prohibition was then in full force, spurring all kinds of gangland activity.
- Alan Greenspan
Meanwhile, unsettling news from Germany continually filtered into the boys' Washington Heights neighborhood. Alan and Bill didn't understand the specifics, but they knew they wanted to help clean up a world that seemed to be going increasingly mad. Greenspan derived great pleasure from printing in tiny letters; into adulthood, his handwriting would remain unusually small and rococo.
He filigreed the ID cards with all kinds of slogans and secret codes and symbols. By the end of the after noon, Alan and Bill had drawn up impressive secret-agent credentials. I think we wound up being the only two members of the damn thing. He was placed in rapid advanced classes and managed to skip a grade, completing the seventh-through ninth-grade curriculums in two years.
Classroom seating was done by height. At the back of the class sat the very tallest students. Greenspan and Callejo filled in the second-to-last row. Greenspan was sprouting up. Surprisingly, he was not a gangly, spastic beanpole. He was actually rather well built and athletic, quite out of keeping with his image of later years. It was during junior high that Greenspan developed a crush on a girl named Corinne Eskris.
But she's not certain that Greenspan ever even approached the object of his affections. Although he was never to renounce his heritage, he was moving away from religious practice, and for the rest of his life, he would be what is sometimes called a "secular Jew. Children should be seen, not heard. Our grandmother was a very nervous person.
She would get hysterical. I remember many times being over there and he'd be in the bedroom, door closed, listening to the radio. He totally separated himself. The school's most prominent feature is a high tower that offer's a stunning panoramic view, sweeping up and down Manhattan, into the Bronx and Queens, and across the Hudson to New Jersey. Throughout his junior-high years, Greenspan had been privy to adolescent rumors about the tower. Supposedly, it was a venue for unimaginable acts by lust-crazed high-school girls.
Thus was the school nicknamed "The Whorehouse on the Hill. It was occupied by armed members of the U.
At the top of it, they had positioned a powerful telescope. The site offered a great vantage point from which to survey the Hudson and Harlem Rivers.
There was concern that a German U-boat might sneak up one of those waterways. The evils that the Detective Scouts had vowed to fight were becoming all too pressing and ominous at a time when America was on the brink of war. He changed his name to Henry and lived with his family in a cramped little apartment on West th Street, not far from Greenspan. Kissinger attended George Washington High two classes ahead of Greenspan.
Their time at the school overlapped, but they did not meet one another until many years later.
Fed Chairman Greenspans Quirky Past
Kissinger actually attended school at night, an option in that era. Despite a backbreaking schedule, Kissinger made straight A's and hoped to become an accountant. Greenspan was also a good student, though he didn't manage straight A's. Among his favorite courses were history and current events. He was also a real joiner during high school.
He was president of his home room, classand served in a group known as lunch squad. George Washington High was extremely crowded during the early s, mainly due to the massive influx of new immigrants.
Lunch squad's main duty was to break up numerous fights that occurred in the cafeteria. Greenspan played clarinet in the school orchestra, sporting a blue sweater emblazoned with a white "GW. Levy was extremely entrepreneurial.