Archive for Monday, September 18, 2000

Biographer puts money on Greenspan

The road to becoming Federal Reserve chairman took many twists and turns

September 18, 2000

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— As a young man, decked out in a canary yellow jacket, he blew a mean saxophone in jazz clubs around the country.

Now the world knows Alan Greenspan as the ever-serious Federal Reserve chairman who has attained near cult status for shepherding the U.S. economy through its longest expansion in history. He is often called the second most powerful man in the government.

The first biography of the 74-year-old chairman traces how Greenspan, raised in poverty by a single mother, transformed himself from nerdy economic thinker to indispensable adviser to five presidents.

New York writer Justin Martin said he was driven to write "Greenspan: The Man Behind Money" by the sense that Greenspan has led a fascinating private life. The book, published by Perseus Publishing, will be out in November.

"I just knew there had to be a story there," Martin said.

Martin interviewed 250 of Greenspan's friends, from elementary school classmates to Greenspan's ex-wife and his current wife, NBC newswoman Andrea Mitchell. The book is not an authorized biography, but the Federal Reserve said Greenspan and Fed staffers helped Martin check his facts.

Greenspan grew up in his grandparent's cramped one-bedroom apartment in New York, where his mother, Rose, had moved after divorcing Greenspan's father, Herbert, when Greenspan was 5.

The precocious Greenspan would sing the Depression-era anthem "Brother, Can You Spare a Dime?" to get spare change from his uncle and would add up three-digit numbers in his head to impress guests.

At 9, Greenspan read "Recovery Ahead," a book his absent father, a sometime economic consultant, had written in praise of President Franklin Delano Roosevelt's economic programs.

In an inscription, the father expressed the hope that his son "may look back and endeavor to interpret the reasoning behind these logical forecasts and begin a like work of your own."

Music man

In school, Greenspan's real love was music. He enrolled at Juilliard School of Music, aiming for a career as a professional musician. But he grew restless and left school to tour in Henry Jerome's dance band, pulling down $62 a week by playing tenor saxophone, clarinet and occasionally the flute.

"Alan was good, although he wasn't primarily a jazz player," Jerome told Martin. "I hired him because he was an excellent musician, but I didn't use him as an improviser."

Greenspan did the band's books and helped band members with their taxes. He came to recognize that he had too little musical talent and left the band after a year to pursue his other passion, numbers. He earned an undergraduate degree in economics in 1948.

It took another 29 years for him to earn a doctorate. New York University awarded it in 1977 based on Greenspan's off-and-on pursuit of the degree and a collection of his writings, including the annual economic report of the president prepared when Greenspan was chairman of the Council of Economic Advisers under President Ford. Greenspan never finished his dissertation.

While Greenspan's first marriage, to Joan Mitchell, an art history student from Canada, ended after just 10 months, the two remained close.

It was through his ex-wife that Greenspan was drawn into the circle of Ayn Rand, controversial author of "The Fountainhead" and "Atlas Shrugged." Rand's followers, known as Objectivists, were intense believers in Rand's celebration of rugged individualism and the triumph of capitalism over socialism.

Rand at first derided Greenspan as "the undertaker" for his preference for somber suits, but in time he was admitted to her inner circle.

While many liberals viewed Objectivists as an odd cult, Greenspan never disavowed his friendship with Rand, explaining that he was grateful to her for opening his eyes to the moral dimension of capitalism.

Highest echelons

A chance encounter in the 1960s with an old jazz band buddy, Leonard Garment, launched Greenspan, by now a successful economic consultant, onto a career as an adviser to presidents.

Garment recruited Greenspan for the 1968 presidential campaign of Garment's law partner, Richard Nixon. Greenspan turned down the chance to join the Nixon administration as budget director, explaining later that he and Nixon "never really got along very well together."

After Nixon's resignation, Greenspan became Ford's economic chief. They developed a close relationship, although his government debut resulted in his biggest public gaffe.

During a summit on inflation, Greenspan, seeking to defend Ford's policies, said, "If you really wanted to examine who percentage-wise is hurt the most in their incomes, it is the Wall Street brokers."

Greenspan was quick to recover from the uproar, which included mock "Save Our Brokers" groups being formed around the country. "Obviously, the poor are suffering more," he contritely told Congress.

As chairman of the Federal Reserve, Greenspan has never repeated such a blunder. Instead, during 13 years at the helm, Greenspan is now known as a master of obfuscation.



www.perseuspublishing.com/books/greenspan.html

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