ALAN Greenspan became one of the most visible architects of U.S. economic policy in recent history, treated with reverence as a virtual oracle at home and abroad for his apparent mastery of the business cycle.
At the height of the 1990s economic boom, in fact, it was difficult to separate the man from the myth during a period when many Wall Street investors felt Greenspan's magic touch might keep the expansion running indefinitely.
That level of faith ended with the bursting of the high-tech bubble in 2000, a mild recession subsequently and a lengthy bear market in stocks in the aftermath. But Greenspan still will leave next January 31 in a glow of appreciation.
"He has been on the job so long, and has been so dominant and so successful, that few Americans any longer draw a distinction between 'Alan Greenspan' and 'the Federal Reserve'," former Fed governor Alan Blinder and his Princeton colleague Ricardo Reis wrote in a widely read paper delivered at the Jackson Hole, Wyo., Fed symposium in August.
Over a tenure that now exceeds 18 years, the 79-year-old conservative has notched an enviable list of accomplishments.
They include his quick and calming responses to the October 1987 stock market crash -- which occurred a scant two months after he took the helm of the Fed -- and his and the Fed's handling of the 1997-1998 Asian and Russian financial contagion as well as the economic turbulence that followed the September 11, 2001 attacks on the United States.
Greenspan took over in 1987 from Paul Volcker, who was credited with quenching the raging inflation of the late 1970s and early 1980s. Under his guidance, the Fed continued to ratchet inflation down to levels that seemed almost unimaginable when Greenspan took office.
Lately the Fed has sounded alarm bells on the rate of price rises, leaving no doubt it treats its inflation-fighting role as a prime objective, though rates remain relatively low by historical standards.
Greenspan's key claim to central banking fame stems from his role in helping shepherd the economy through its longest expansion ever during the 1990s. It got some of its fuel from a huge stocks rally that Greenspan famously labeled "irrational exuberance" in 1996, though he later said it was not his role to second-guess investors.
That decade of unprecedented prosperity helped vault Greenspan to the status of a celebrity -- so celebrated that a recent newspaper article said traders were willing to pay thousands of dollars for his portrait. Some of his mystique stemmed from the fact that his personal demeanor and appearance was so contrary to that of any high-stepping celebrity -- a small, slightly hunched figure who appeared pensive, serious and quiet in public.
But he was not above playing to the image of oracle, joking in the mid-1990s that he worried about speaking too clearly.
"What I've learned at the Fed is a new language called 'Fed speak.' We learn to mumble with great incoherence," he said.
One tale told about him was that his speech was so hard to decipher that NBC television reporter Andrea Mitchell commented she "just didn't get it" the first two or three times he proposed marriage to her. The couple dated for 12 years before they married in April 1997, the second marriage for both.
Although many associates describe Greenspan as reserved, he was well known for his ability to navigate the world of Washington power politics, something that undoubtedly helped to account for the longevity of his career as Fed chairman.
Born in New York City in 1926, Greenspan was the only child of Rose and Herbert Greenspan. His parents divorced when he was young and he was raised in a small apartment in the Washington Heights section of New York with his mother and grandparents.
Greenspan's first love was music and he spent two years at New York's Juilliard School studying the clarinet. Before turning to economics studies at New York University, he toured briefly with a swing band as a saxophone player.
If there is a substantial criticism of Greenspan, it lies in the complaint that he leaves few guideposts for the central bankers who follow him to gauge why he was so successful.
"Much of the secret to Greenspan's success remains a secret," said authors Blinder and Reis. "It is too bad that he has not seen fit to share more of what he apparently knows with staff, FOMC (Federal Open Market Committee) colleagues, economists and the broader public."