Weekly Report: The Fiat Money Maestro

The Fiat Money Maestro

Former Federal Reserve Chairman Alan Greenspan passed away last week at the age of 100. Greenspan chaired the Fed from 1987 through 2006.

Despite being a lifelong Republican, Greenspan refused to lower interest rates, though doing so may have helped George H.W. Bush’s 1992 reelection campaign. However, he did tailor monetary policy to support President Clinton’s 1993 budget, as well as the 1997 bipartisan budget deal.

Greenspan’s handling of monetary policy was widely credited as responsible for the 1990s strong economy. As a result, the cult of the Federal Reserve chairman reached new heights under Greenspan. During Greenspan’s tenure it became so common for the Fed to act to help bail out large financial firms that experienced financial difficulty that many began referring to the “Greenspan put.” Greenspan was even the subject of a bestselling biography by Bob Woodward titled Maestro. New Republic reporter Stephen Glass wrote about Wall Street professionals maintaining a shrine to Greenspan. While the story was later revealed to be one of many fabrications created by Glass, at the time it seemed believable that Wall Street offices would contain shrines to Greenspan.