Alan Greenspan, Fed Chair from 1987 to 2006: glimpses a fateful tenure and a defining era.

“Regulation – which is based on force and fear – undermines the moral base of business dealings... Protection of the consumer by regulation is thus illusory.”
— Alan Greenspan, “The Assault on Integrity,” in Ayn Rand et al., Capitalism: The Unknown Ideal, p. 120.

“Since I’ve become a central banker, I’ve learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.”
— Alan Greenspan, testimony before Congress; quoted in Alan Murray, “Fed Chief Sees No Acceleration in Inflation Rate,” Wall Street Journal, Sep 22, 1987, pp. 3.

“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity (myself especially) are in a state of shocked disbelief… The whole intellectual edifice, however, collapsed in the summer of last year, because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria.”
“An ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to — to exist, you need an ideology. The question is whether it is accurate or not. And what I’m saying to you is, yes, I found a flaw. I don’t know how significant or permanent it is, but I’ve been very distressed by that fact.”
Rep. Waxman: “You found a flaw in the reality…”
Greenspan: “Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.”
Rep. Waxman: “In other words, you found that your view of the world, your ideology, was not right, it was not working?”
Greenspan: “That is — precisely. No, that’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.”
— Alan Greenspan, testimony before the U.S. House Committee on Oversight and Government Reform, October 23, 2008; PBS NewsHour, “Greenspan Admits ‘Flaw’ to Congress, Predicts More Economic Problems” / The Financial Crisis and the Role of Federal Regulators, 110th Cong., 2nd sess., October 23, 2008.

The following excellent books offer insightful critical perspectives on central banking, financial power, deregulation, and the broader political economy of of Alan Greenspan’s Fed era:

Davis, Gerald F. 2009. Managed by the Markets: How Finance Re-Shaped America. Oxford University Press.

Epstein, Gerald. 2019. The Political Economy of Central Banking: Contested Control and the Power of Finance. Edward Elgar.

Fligstein, Neil. 2021. The Banks Did It: An Anatomy of the Financial Crisis. Harvard University Press.

Jacobs, Lawrence R., and Desmond King. 2016. Fed Power: How Finance Wins. Oxford University Press.

Krippner, Greta. 2011. Capitalizing on Crisis: The Political Origins of the Rise of Finance. Harvard University Press.

MacKenzie, Donald. 2006. An Engine, Not a Camera: How Financial Models Shape Markets. MIT Press.

Mirowski, Philip. 2013. Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown. Verso.

Pixley, Jocelyn. 2018. Central Banks, Democratic States and Financial Power. Cambridge University Press.

Schwartz, Herman M. 2009. Subprime Nation: American Power, Global Capital, and the Housing Bubble. Cornell University Press.

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