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Former Julliard Student and Musician about to step into US FED History
NEWSMAKER-Greenspan about to step into U.S. Fed history
WASHINGTON, Jan 30 (Reuters) - When Alan Greenspan walks out the door of the U.S. Federal Reserve on Tuesday after 18-1/2 years as its leader, he will already have secured his place in economic history.
But the 79-year-old Fed chief isn't about to fade away -- on Wednesday he'll likely be back at work at a new location with plans for a book, a consulting service and speaking engagements at least on his mind.
His long and largely successful tenure has made Greenspan arguably the most famous chairman in the history of the U.S. central bank, treated with reverence as a virtual oracle at home and abroad for his seeming mastery of the business cycle.
At the height of the 1990s economic boom -- a record expansion that lasted a decade -- it was difficult to separate the man from the myth and many on Wall Street felt Greenspan's magic touch might keep growth running indefinitely.
While that faith was tested with the bursting of the high-technology bubble in 2000, followed by a subsequent mild recession and a prolonged bear market in stocks, the world has rushed to praise him in his waning months on the job.
AWARDS AND ADULATION
Saluted at a White House dinner last week, handed awards including the Defense Department's Medal for Distinguished Public Service and lauded by colleagues, Greenspan is leaving without exit interviews to reporters clamoring for them.
His unobtrusive exit seems designed to avoid upstaging successor Ben Bernanke, but it's also in keeping with a record of allowing his accomplishments to speak for themselves.
They include his calm response to such economic turbulence as the stock market crash of October 1987 -- a scant two months after he took over at the Fed -- the 1997-1998 Asian and Russian financial contagion, and the economic shockwaves from the Sept. 11, 2001, attacks on the United States.
Perhaps the main reason for Greenspan's claim to central banking fame stems from his role in helping shepherd the economy through its longest-ever expansion.
That bumper growth period of the 1990s was fueled in part by 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.
Allan Hubbard, director of the White House's National Economic Council, indicated on Friday that President George W. Bush may tap Greenspan's wisdom in the future.
"His counsel, his thoughts, his wisdom are enormously appreciated," Hubbard said on CNBC television. "I'm confident that President Bush will maintain a dialogue with him."
Greenspan is not without critics, including some who say he let the stock price boom run too long without restraint, and that he is leaving behind a perilous bubble in housing prices.
His response to the accusation about stocks was that a central bank lacks the right tools to end price bubbles, though it can help ease the pain afterward. The former jazz musician took over the Fed in 1987 from Paul Volcker, himself credited with quenching the raging inflation of the late 1970s and early 1980s. Under Greenspan, the Fed ratcheted inflation down further, to rates that seemed unimaginable when he took office.
GROWTH SLOWING
Greenspan leaves a mixed economic picture behind him.
The pace of growth slowed at the end of 2005 but many economists see it picking up smartly this quarter. This is playing out amid lively concerns over potential inflation as energy prices hum along above $60 a barrel -- levels unthought of a few years ago.
The Fed chief is widely expected to cap his reign on Tuesday with a 14th straight interest-rate increase since mid-2004, though the federal funds rate remains low by historical standards.
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.
His first love was baseball, a passion that gave way to music in his teens. He spent two years at New York's Juilliard School studying the clarinet.
Before studying economics at New York University, he toured briefly with a swing band as a saxophone player but he turned to numbers when he realized that was where his skill -- and his future -- lay.
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