Speaker 1: This is breaking news from Bloomberg.
Speaker 2: Some breaking news at the moment. Alan Greenspan, the influential
Speaker 2: economists who steered US monetary policy during his five terms
Speaker 2: as Chairman of the Federal Reserve under four presidents, died Monday.
Speaker 2: His wife said in a statement he was one hundred.
Speaker 2: This is according to NBC. Right now, let's go to
Speaker 2: David Wesson with some thoughts on the life of Alan Greenspin.
Speaker 1: Greenspan's first exposure to the global financial system he would
Speaker 1: lead came playing the clarinet in a jazz band at
Speaker 1: a New Hampshire resort in nineteen forty four, not really
Speaker 1: understanding at the time that the delegates gathered one floor
Speaker 1: below him were working through what would become the Breton
Speaker 1: Woods Accords.
Speaker 3: I was at the Mount Washington Hotel in Breton Woods,
Speaker 3: New Hampshire. I didn't have a clue what all of
Speaker 3: that noise around me was. And somebody said there was
Speaker 3: a big convention here. I said, oh, too bad. I
Speaker 3: didn't think about it again for seventy five years.
Speaker 1: Forty three years later, he had gone from playing in
Speaker 1: the band to becoming simply the chairman presiding over the
Speaker 1: Federal Reserve. For nearly twenty years. That's the second longest
Speaker 1: tenure in history. Known for supporting the economy through what
Speaker 1: became known as the Greenspan put that helped give the
Speaker 1: United States unprecedented prosperity through the nineteen nineties. Alan Greenspan
Speaker 1: was the first to admit he didn't know everything, not
Speaker 1: even he could have anticipated something never taught in economics,
Speaker 1: the possibility of negative interest rates.
Speaker 3: How in the world did we end up with negative
Speaker 3: interest rates? Interest rates are a major component of what
Speaker 3: eccounts called time preference. It's the extent of discounting human
Speaker 3: beings make about values today versus values tomorrow.
Speaker 1: But to the end, Chair Greenspan remained focused on the
Speaker 1: big questions that he found timeless, and especially on the
Speaker 1: threat posed by our looming national deficit.
Speaker 3: The one thing that has been a very considerable surprise
Speaker 3: in recent years is the extent to which unequivocally entitlements
Speaker 3: of crowding out gross domestic savings dollar a dollar. To
Speaker 3: get that changed is a huge political issue.
Speaker 1: Though he has been gone from his position at the
Speaker 1: top of the Federal Reserve for over a quarter century,
Speaker 1: the whole that he leaves will continue on well into
Speaker 1: the future.
Speaker 2: That was Bloomberg Stavid Weston with some thoughts on the
Speaker 2: passing of Alan Greenspan. Former fits here. Alan Greenspan, who
Speaker 2: died today at the age of one hundred, Isabell Lee
Speaker 2: joining me Tom Keen is off today Isabelle Lee. So
Speaker 2: some big news. A influential voice, to say the least
Speaker 2: five terms as Chairman of the Federal Reserve under four presidents.
Speaker 4: And he achieved celebrity status. I think under President Bill
Speaker 4: Clinton win stocks to record heis. I think the Economist
Speaker 4: magazine dubbed him a rock star, and a lot of
Speaker 4: his admirers call him the maestro. Definitely a revered former
Speaker 4: FED chair.
Speaker 2: Yeah, I mean one hundred years that it is a
Speaker 2: heck of a run. James Eggohoff joins us here. He's
Speaker 2: the chief US economist for BNP Parrybah. He's in our
Speaker 2: Bloomberg and directive broker studio. James just huge news from
Speaker 2: folks like economists, market watchers. Alan Greenspan just a monumental.
Speaker 5: Figure, a huge figure in the history of the Federal Reserve,
Speaker 5: really a dominant in the dominant figure in the way
Speaker 5: the Fed communicates with markets, the way the Fed operates
Speaker 5: in markets. Much of what we debate, including this past week,
Speaker 5: is a reaction to his legacy. How does what is
Speaker 5: the role of the chair versus the rest of the committee?
Speaker 5: Alan Greenspin was an over larger than life figure who
Speaker 5: set policy pretty much independently. The way he communicates, the
Speaker 5: way he would walk around with a big briefrace or
Speaker 5: a small briefcase, the signal rate moves, his approach to
Speaker 5: his public speaking. A lot of what we debate now
Speaker 5: is a reaction to.
Speaker 1: His term in office.
Speaker 4: Even the phrase irrational exuberns is something that he coined
Speaker 4: and I still hear that decades after.
Speaker 5: Well, it's because Alan Greenspan led the economy through the
Speaker 5: nineties through the last time we had a very very
Speaker 5: exuberant tech boom, and so some of these historical echoes
Speaker 5: we hear today. Alan Greenspan, for example, cut rates three
Speaker 5: times that to the failure of long term capital in
Speaker 5: ninety eight, which we think out which we think Jay
Speaker 5: Powell lifted from very very liberally last year winning cut
Speaker 5: rates after tariffs. And so now a lot of debate
Speaker 5: now about whether new chair wars will have to lift
Speaker 5: a page from Alan Greenspan's playbook in ninte ninety nine
Speaker 5: when he took those insurance cuts back.
Speaker 6: Well, you forget.
Speaker 2: I mean mister Greenspan service bed chair chief for eighteen
Speaker 2: years nineteen eighty seven to two thousand and six. It
Speaker 2: was credit with guiding a record US economic expansion, but
Speaker 2: his legacy was laan or dimmed by the financial crisis
Speaker 2: that erupted in two thousand and eight. James, thanks so much,
Speaker 2: appreciate it as always. James Egoholf, chief US Economists for BNP.
Speaker 2: Parry bought lots of news flows out here today with
Speaker 2: mister Greenspan. We want to get some perspective here on
Speaker 2: these items. John mcleithwaite joints this here, editor in chief
Speaker 2: of Bloomberg News. He is in our London office at
Speaker 2: the moment. John talked to us about your thoughts here
Speaker 2: on Alan green Span. Such an extraordinary career spanning so
Speaker 2: many years, so many presidencies and reshaping kind of the
Speaker 2: Federal Reserve. Love to get your thoughts on mister green
Speaker 2: Pen and his passing.
Speaker 6: Well, obviously it's a sad day in that respect. I
Speaker 6: think he you know, green Span was one of the
Speaker 6: great central bankers on multiple different levels. Really very very intelligent,
Speaker 6: also kind of very cryptic in terms of the way
Speaker 6: he often communicated to people. But I think he always
Speaker 6: had this very long sort of intellectual history, goes back
Speaker 6: all the way to the fact that he was involved
Speaker 6: with him Anne Rand and stuff like that. He went
Speaker 6: through different kind of intellectual fashions, and on the whole
Speaker 6: he ran the economy pretty well well. There will always
Speaker 6: be people who question, you know, how much his loosening
Speaker 6: set up the kind of financial crisis, but you know
Speaker 6: there were other factors at work there as well. It
Speaker 6: wasn't just him. So I think he will he goes
Speaker 6: as a giant of central banking.
Speaker 4: What do you think is the biggest legacy that he
Speaker 4: left us with, especially now as the Federal Reserve and
Speaker 4: questions about it independence continue to hound markets and investors.
Speaker 6: That's a good point. I think he was a very
Speaker 6: strong advocate of central bank independence. I mean, sometimes you
Speaker 6: forget these things that you forget how different the world
Speaker 6: was at one time. But the fact that you ended
Speaker 6: up with Paul Volka, Alan Greenspan, obviously people like Ben
Speaker 6: Bananke afterwards. The whole presumption of what they did was
Speaker 6: that the Federal Reserve should be separate and independent in
Speaker 6: places like Britain more at the moment. You know, that
Speaker 6: was also a more recent things. This is not something
Speaker 6: that has always been there. It's the kind of reputation
Speaker 6: that has to be built. And it's interesting the way
Speaker 6: that Jay Powell has managed to sort of defend that,
Speaker 6: I think actually relatively successfully against some Donald Trump's attempts
Speaker 6: to sort of intervene in that area.
Speaker 2: John, thank you so much for We really appreciate getting
Speaker 2: your thoughts here and your perspective. John mcclethwaite, he's the
Speaker 2: editor in chief of Bloomberg News. He is in Lumberg's
Speaker 2: London headquarters of Queen Victoria History