Judging A Giant: Greenspan's Legacy -- A Worldly Tenure

Fed Chairman Alan Greenspan ran the U.S. central bank during interesting times, marked by many significant global events and financial shocks, which will no doubt figure into his aptly titled book “The Age of Turbulence: Adventures in a New World”, due out Sept. 17.

At the same time, Fed watchers say there was not one singular event or challenge that defined his tenure, unlike his predecessor, Paul Volcker, who ran the Fed from 1979-1987.

Volcker’s challenge was to defeat inflation, which was already at a menacing double-digit level when he assumed the post. Inflation peaked at 13.5% in 1981 and was reduced to 3.2% in 1983, but not without some very tough medicine. The Fed raised interest rates relentlessly, such that the discount rate peaked at 21.5% in late 1980, the economy fell into itsworst recession in almost half a century in 1981 and the unemployment rate rose to an astonishing 10.7% in 1982.

Greenspan faced no such immediate trial my fire, but Volcker’s inflation battle serves as both the backdrop and yardstick for the Greenspan era. About two months after he was sworn in on Aug. 11, 1987, Greenspan met his first test, what longtime Fed watcher David Jones calls a series of “moderately serious crises” and -- by most accounts – passed with flying colors.

Here are the major events of the Greenspan era.                 

•        Stock Market Crash  -- 1987
•        Savings & Loan Crisis –- 1988-1990
•        Fall of Berlin Wall –- 1989
•        Tiananmen Square Protests -- 1989
•        End of the USSR –- 1990-1991
•        Mini Crash of Oct 1990
•        Invasion of Kuwait/Persian Gulf War –- 1990–1991
•        U.S. Recession –- 1990-1991
•        Mexican Peso Crisis --1994
•        Asian Financial Crisis -- 1997
•        Russian Debt Crisis -- 1998
•        Long-Term Capital Management Collapse -- 1998
•        Argentina Economic Crisis –- 1999-2002
•        Nasdaq Collapse -- 2000
•        Bear Market –- 2001-2002
•        U.S. Recession -- 2001
•        9/11  -- 2001
•        Iraq War -- 2003
•        Deflation Scare -- 2003-2004

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