// BEGIN editorial data var i = 0; var GreenspanTimeline = new Array(); GreenspanTimeline.ID = "GreenspanTimeline"; GreenspanTimeline.ID_WB = 9664427; GreenspanTimeline.sPubDate = "10/25/2008 12:04:11 AM GMT"; GreenspanTimeline.navsectionID = "3032221" GreenspanTimeline.appFmt = 2; GreenspanTimeline.itemsPerPage = 1; GreenspanTimeline.appWidth = 624; GreenspanTimeline.appHeader = ""; GreenspanTimeline.sTitle = "Greenspan's greatest hits"; GreenspanTimeline.appFooter = "Source: MSNBC.com research "; GreenspanTimeline.appNavStyle = 3; GreenspanTimeline.appLayout = 3; GreenspanTimeline.copyHeight = 300; GreenspanTimeline.copyWidth = 410; GreenspanTimeline.copyMargin = 9; GreenspanTimeline[i++] = new Array("","1987: The Fed stands ready","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
Oct. 20, 1987 – Only two months after taking office as Fed chief, Greenspan faces one of the biggest crises of his career when the Dow Jones industrial average plunges 508 points, a record one-day drop of more than 20 percent. Greenspan helps calm the markets with a statement affirming the Fed’s “readiness to serve as a source of liquidity to support the economic and financial system.”"; GreenspanTimeline[i++] = new Array("","1988: Greenspeak","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
Greenspan is famous for his equivocation and doublespeak in speeches and congressional testimony. In 1988, opening a speech to the Economic Club of New York, he poked fun at his often-puzzling pronouncements, saying, ''I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said.''
"; GreenspanTimeline[i++] = new Array("","1989: Greenspan and Keating","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
Greenspan became entangled in the epic collapse of Lincoln Savings and Loan Association, one of the costliest in the nation’s history, because prior to his appointment as Fed chief he had testified before Congress and lobbied regulators on behalf of Lincoln and its owner, Arizona millionaire Charles Keating Jr. In several rare, on-the-record interviews, he defended his activities as a private consultant.
\"I look back and I say to myself, ‘Was there something I should have seen and didn't see?' and the answer is, ‘There was nothing visible -- at least to me,’” Greenspan told The Associated Press."; GreenspanTimeline[i++] = new Array("","1995: The inscrutable Fed chief","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
At a rare news conference in Seattle, Greenspan demonstrated his well-known capacity for obfuscation, saying that the United States had entered a slowdown that was \"quite pronounced,\" but that he did not expect a recession soon.

The following day, according to the book “Maestro” by Bob Woodward, the New York Times ran the story under the headline “Greenspan Sees Chance Of Recession,” while the Washington Post declared, “Recession Is Unlikely, Greenspan Concludes.”"; GreenspanTimeline[i++] = new Array("","1996: “Irrational exuberance”","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
In December 1996, shortly after the re-election of President Clinton, and with the Dow Jones at the then-elevated level of 6,400, Greenspan made his famous comment about “irrational exuberance,” putting a brief damper on global equity markets. But the asset bubble continued to grow for more than three years: “But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? … (W)e should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy.”"; GreenspanTimeline[i++] = new Array("","2001: The “tyranny of zero”","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
In January 2001, as President Bush was preparing to ask Congress for a 10-year, $1.6 trillion tax cut, Greenspan delivered a major political plum to the new administration by saying that a tax cut could do “noticeable good” in combating the emerging economic slowdown. Greenspan’s main rationale for supporting a tax cut was his concern that the federal budget surpluses were adding up too rapidly, setting up the possibility that the federal debt would be eliminated and the government would have to invest its excess cash.

\"I must say, I never expected to see the day where I would be talking about anything other than reducing the debt,\" Greenspan told a congressional panel. \"I'm running into the tyranny of zero, which is where you can't reduce it any more. And so, have my views changed? Yes, they've changed. They have to change. I see no alternative to that.\"
"; GreenspanTimeline[i++] = new Array("","2002: Looking back at the bubble","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
Greenspan has been criticized for failing to deflate the stock bubble of the late 1990s by raising interest rates sooner. But he has defended the Fed’s actions during that period, saying it is virtually impossible for the central bank to prevent or even detect bubbles while they are growing.

In a 2002 speech in Jackson Hole, Wyo., he explained why the Fed did not act more aggressively: “As events evolved, we recognized that, despite our suspicions, it was very difficult to definitively identify a bubble until after the fact -- that is, when its bursting confirmed its existence. Moreover, it was far from obvious that bubbles, even if identified early, could be preempted short of the central bank inducing a substantial contraction in economic activity -- the very outcome we would be seeking to avoid.”"; GreenspanTimeline[i++] = new Array("","2003: Another tax cut?","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
While Greenspan made friends in the Bush administration with his endorsement of the 2001 tax-cut plan, by 2003 circumstances had changed radically, with the federal budget back in deficit and the nation about to go to war against Iraq.

In testimony to a congressional panel, he pointedly declined to endorse a proposed $674 billion in fresh tax cuts, which ultimately passed in a revised form: “I’m one of the few people who is not as yet convinced that stimulus is a desirable policy at this point in time,” Greenspan said. “It depends very much on how one reads what is going on under a whole structure of geopolitical risk.”
"; GreenspanTimeline[i++] = new Array("","2005: Interest-rate “conundrum”","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
More than seven months after the Fed began steadily hiking short-term interest rates, long-term rates like those for 30-year mortgages were actually much lower than they had been before. In one of his periodic appearances on Capitol Hill, Greenspan famously coined a word to describe the phenomenon: \"For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum,” he said.
"; GreenspanTimeline[i++] = new Array("","2005: Housing “froth”","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
In May, Greenspan weighed in on the rapidly rising price of housing in many parts of the country, saying he did not see a national bubble but, “There do appear to be, at a minimum, signs of froth in some local markets.”

Later in the year, he issued a more sharply worded warning about the possibility that housing prices could decline sharply in some markets: “To some extent, those higher values may be reflecting the increased flexibility and resilience of our economy. But what (investors) perceive as newly abundant liquidity can readily disappear. Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.”
"; GreenspanTimeline[i++] = new Array("","2008: \"Shocked disbelief\"","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); GreenspanTimeline[i-1].body = "
Badgered by lawmakers at a lengthy hearing, the 82-year-old Greenspan denied the nation’s economic crisis was his fault but conceded the economic meltdown had revealed a flaw in a lifetime of economic thinking. Greenspan said he had made a “mistake” in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. Greenspan called that “a flaw in the model ... that defines how the world works.” He said the meltdown had left him in a “state of shocked disbelief.”
"; // END editorial data