Introduction Alan Greenspan spent five terms as chairman of the Federal Reserve. In that time, he helped shape this nation more than many people realize. In this leadership paper, I will be showing his leadership qualities in his early years all the way through today. I will also be showing what his past actions and spoken words have done to change things today even though he is out of the Board of Governors. It is best to start out at the beginning to learn more about this very articulate person. Biography Alan Greenspan was born in 1926 in New York City. His persistence in school helped him achieve his B.
S. in Economics and then an M. A. in Economics at New York University. He achieved his Ph. D. in Economics from New York University in 1977, when he was Chairman and President of Townsend-Greenspan & Co. Greenspan began his Chairmanship and Presidency in 1955 and stayed through 1987. He became principal owner of the company in 1958. The Townsend-Greenspan & Co. was an economic consulting firm that provided simulations of the national economy and various industries. His main leadership role came in 1987 when Greenspan was nominated and confirmed for the position of Chairman of the Federal Reserve.
The spotlight was brightest on him at that time. For over 19 years he was the person that was in charge of “promoting sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates. ” Career Analysis During his tenure with Townsend-Greenspan & Company, Greenspan was involved in various other projects. He agreed to serve Richard Nixon as his coordinator on domestic policy in 1968. He also served as a corporate director for a number of companies like General Foods, Inc. nd J. P. Morgan & Company. On June 2nd, 1987, Greenspan was nominated by President Regan as chairman of the Board of Governors of the Federal Reserve and the Senate confirmed him on August 11th, 1987. As chairman, Greenspan was the head of the central banking system of the United States. The Federal Reserve Board has broad regulatory powers over the money supply and the credit structure. Alan Greenspan’s nomination to the chairman of the Board of Governors of the Federal Reserve was no mistake. His leadership experience with
Townsend-Greenspan & Company as President and Chairman showed he had what it took to do the job. The fact that he had experience as a corporate director in other companies at the same time demonstrated a very strong work ethic. President Reagan knew Greenspan personally due to the fact that Greenspan was an advisor to other Republican Presidents. Greenspan’s tenure as the Chairman of the Federal Reserve featured many high and low points. Many of those points are still debated today by various economists and the media. There has been great growth under Greenspan, but there have also been setbacks. Under his watch, we’ve had the two of the longest expansions in our economic history broken by two of the briefest recessions,” said Denver financier David Jones. Lyle Gramley, a Fed governor during the 1980s, also had positive things to say about Greenspan. “He has been called, and I think justifiably so, the greatest central banker in history. ” At the same time though, some media outlets have not been kind to Greenspan. Some economists have said that he is to blame for the housing crisis that we are facing today. Others say that the inflation rate hikes led to the recession in 1990 and 1991. Peter S.
Goodman from the New York Times said that Greenspan let the market run free for too long and now we are paying for it and will be for a few years to come. Still, a majority of the reviews on his performance remain positive. Even now on the lecture circuit, he is still a very popular man. Greenspan still works as a private advisor through his company Greenspan Associates LLC. His memoir titled “The Age of Turbulence: Adventures in a New World” hit number two on the New York Times best-sellers list for non-fiction. Leadership Analysis This was the most difficult part for me as I found it hard to find sources close to Mr.
Greenspan that spoke to how effective of a leader he was. I had the opportunity to have lunch with him back in May of 2003 when he visited the Federal Reserve Bank of Dallas. At the time, the one thing I can say about him is that he chooses his words very methodically. Some of the things he says requires a certain amount of deciphering. One of his most famous quotes was, “I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said. ” Lets go back to December 5th, 1996 when Greenspan said “Irrational exuberance and unduly escalating stock prices. Those words alone triggered markets around the world to decline. The Japanese stock market took a 3. 2% plunge and the German market fell 4%. When the stock market opened in the United States, the New York Stock Exchange went down 145 points in 30 minutes. A good leader should have the ability to speak articulately. Greenspan goes above and beyond that description. When Alan Greenspan spoke, the world listened. This example shows just how powerful of a spokesperson he is. A good spokesperson answers inquiries and formally reporting to individuals and groups outside the manager’s direct organizational unit.
Greenspan not only had to answer to the board he presided over, but every market around the world as well as the stockholders and other individuals that wanted to hear what he had to say about the market. Greenspan was also a good business man. He ran his own company prior to his Senate confirmation to Federal Reserve. He also served as corporate director for a variety of companies such as The Pittston Company, Mobil Corporation, and Capital Cities/ABC, INC. After he stepped down from his post at the Federal Reserve, he formed his own company once again. This shows entrepreneurial leadership qualities as well as strategic planning abilities.
To be able to talk with customers and employees in an organization he controls, as well as being involved in the growth of a variety of companies speaks volumes for this man. The last main leadership quality he possessed was his ability to be a figurehead. What I admire most is his ability to build and sustain the credibility of the central bank. There is nothing more valuable than credibility in the banking industry since the financial markets of a free economy are global. To maintain that credibility is a key quality that should not be overlooked either.
Alan Greenspan served as that figurehead for the Federal Reserve for 19 years. He also served as a figurehead in the companies he was a corporate director for as well. He made himself available to outsiders as a representative of all these organizations. While he has been viewed as a corporate director, president, or CEO of these organizations at one point in time, he was viewed as the Federal Reserve when he was chairperson there. The media and millions of people across the globe that paid attention to what he had to say made him just that much more important. Conclusion
The legacy Alan Greenspan left behind is still being analyzed today. One thing is perfectly clear however, and that is that Alan Greenspan is born to lead. His leadership abilities have been proven not only in the business sector, but also the highest levels of government. Even at the age of 82, he is still leading by example today. This just goes to show you how much drive and determination he has and how much he has left to give. References Alan Greenspan Biography http://www. alangreenspan. org/ Wikipedia, 11/2008, Alan Greenspan http://en. wikipedia. org/wiki/Alan_greenspan
Leading Blog, Michael McKinney, 9/16/2007, Alan Greenspan: The Age of Turbulence http://www. leadershipnow. com/leadingblog/2007/09/alan_greenspan_the_age_of_turb. html The Leadership Quarterly, Michelle C. Bligh, 04/2007, The Power of leading subtly: Alan Greenspan, rhetorical leadership, and monetary policy http://www. sciencedirect. com/science? _ob=ArticleURL&_udi=B6W5N-4N5CSMD-1&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=21736d7a817409a0896f88147583685a U. S. News, Matthew Benjamin, 10/24/2005, The Greenspan Legacy http://www. snews. com/usnews/news/articles/051024/24greenspan. htm? track=rss New York Times, 7/30/1987, Greenspan’s Firm is Closing http://query. nytimes. com/gst/fullpage. html? res=9B0DE0DF1F3FF933A05754C0A961948260 San Francisco Chronicle, Tom Abate, 1/29/2006, Greenspan Legacy – Long Expansions, Short Recessions. http://www. sfgate. com/cgi-bin/article. cgi? file=/c/a/2006/01/29/MNGMHGVCER1. DTL New York Times, Peter S. Goodman, 10/8/2008, Taking Hard New Look at a Greenspan Legacy http://www. nytimes. com/2008/10/09/business/economy/09greenspan. html