As Chairman of the Federal Reserve Board during the September 11 attacks, Alan Greenspan lived in interesting times. Unknown to many, he holds one of the most important role in our country. Having to decide for our country’s economy is no easy feat but he has done such 36 times over and during those times he made the right decisions. For nearly 20 years he headed the America’s Central Bank and called the shots to lower or raise the interest rates. This job is crucial because by lowering the interest rates we make the future more valuable than the present.
This gives people the chance to focus on constructing houses, building factories, invest in scientific researches and other infrastructures that serves as an investment for the future. In raising interest rates we simply redirect our focus to the present and spent money that has no effect on the future. This decision is important to the market economy that we have because even though we give the populace and capitalist the freedom to raise the interest rates, we still need a central planner to direct our economy.
Times of fear and chaos such as the September 11 attack results to high unemployment. This puts the economy at risk and destabilizing inflation occurs. Perhaps the most daunting times of terror in America would be that of the September 11 attacks. After the bombing the entire country was enveloped in fear and the stock market. It was expected that the economy would plunge down and the dollar will be devaluated immensely. Economists have calculated the cost of the attacks to be detrimental to the economy but Greenspan did a wonderful job to make it look like nothing happened.
No economic downfall, no extreme devaluation of dollar and no stock market crash. To minimize the effect of terror to the country is pretty much what he does and this part he did extraordinarily. That part of his life is written in his book “The Age of Turbulence”. The first part of his book was his autobiography where one man tells his life from the introvert clarinetist to the economist that he has become. He was a talented young man in search for his American dream but happened to have come face to face with trials such as the divorce of his parents and his very own divorce with his wife.
His talent in mathematics landed him the top spot of the FED. He also relates his views on the economy and the world of the technocrats with its complicated functions and structure. However that part of the book is rather hard to digest for lay people. Having to take a peep at the brain of a genius is rather difficult. But this part of the book revealed why the Americans are struggling to live the American Dream. Part of the 36 crucial decisions that he has made in his job is to approve the Adjustable-rate Mortgages in 2000.
This provides the American citizen loans for their house with low interest rates for 5 years but the interest rate may increase to the maximum amount after that span of time. This is a risk for home owners since they cannot predict their economic status five years from the time they acquired their houses. If they get to be well paid after that then they can afford to stay in their house after five years, if not then the consequences of paying the maximum interest will follow. Since most those who availed for the loan did not land a better job in five years time, they have no means in paying for the interest.
In return, most of them end up selling their house or moving out. So much for the American dream of buying your own house. ARM caused so many people to move out of their dream home. Though the book was written in the first person he was not able to let the people into his life as emotional as possible. It was about his life as an economist but it seems he did not say his personal dreams are. It’s as though the books tell us that he wanted nothing else but to bring greater good to the country.
Emotional touch was also not very intense though he described his wife as “beautiful” but he was not able to say how beautiful she is. To some degree he failed to get his readers see what he truly is besides the economist that he is. He was critical about others but he was less critical on himself. Much of his efforts on being the chairman of the FED is dedicated on maintaining the interest rates. Some do not agree with his decisions as they do not yet see the benefits of his decisions, however he believes that in time his shots where the best shorts an economist can ever make.
Part of his book also made comments on politics and scrutinized W Bush for his decisions and over spending. He was against the war in Iraq as he pointed out that it was basically a war for oil. He lived a life that was close to that of the American dream. Being the only child of Jewish emigres from Europe who went to America to follow the American dream, I must say he is very successful at that. Though his family was not poverty-stricken with his dad a Wall Street broker, he said that he is looking for money.
Living in a capitalist world and inspired by great economist like Ayn Rand, he was head on to pursue his American Dream. This he was able to do so since it is reported that he earns six figures just for a speech alone. He shares his view of the American Economy in 2030 taking into consideration various factors that ay affect the flow of income in the State. These factors are weather changes, wars, investment on education and research, and immigration of skilled worker from different parts of the globe to America.
He holds optimistic view of the American Economy despite the economic depression that lurks within the country. As a man who lived in times as interesting as the September 11 attacks, he had the chance to prove his worth as an economist. Perhaps as a person we can only take a peep at a tiny hole that he has opened for us through his books. One thing is certain though, he is a man who chased his American dream and got a hold of it.
Greenspan, Alan. (2007) The Age of Turbulence: Adventure in a New World. Penguin Press
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