Remembering Former Fed Chairman Alan Greenspan

**Betsy Duke** (0:02)
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**SPEAKER_2** (0:08)
This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Tim Stenovec** (0:31)
Well, Alan Greenspan, the Federal Reserve Chairman, proclaimed a wizard for guiding then-record US economic expansion, only to see his luster dimmed by the financial crisis that erupted less than two years after he stepped down, has died. He was 100 years old, 18 years as Fed chief, 1987, all the way, Carol, until his retirement at the start of 2006 Stock market, boom, low unemployment is what we saw over that time.

**Carol Massar** (0:55)
Yeah, some remarkable cycles, certainly, in the market environment. We should point out that more so than four presidents or more than four presidents he served under or the seven treasury secretaries he worked alongside. I mean, Greenspan was really seen as the maestro who kept the economy humming. And there were so many things that you think about.
We watched, we monitored with him, we parsed his words, we do with any Fed chair, but there are things that he said that have stayed with us even until today.

**Tim Stenovec** (1:25)
I want to bring in Betsy Duke, former governor of the Federal Reserve. She was nominated to that position by President George W. Bush in 2007 She served until 2013 She's also the former chair of Wells Fargo, the former chair too of the American Bankers Association. She joins us from Virginia Beach. Betsy, welcome. You were also on the board of directors of the Richmond Fed from 1998 to 2000 That time, of course, overlapped when Alan Greenspan was chair of the Fed.
Just today, as you remember his legacy, what is it to you and to us?

**Betsy Duke** (1:56)
So a couple of things for Chairman Greenspan, and this is both a sad day but a day to celebrate certainly a life well lived.
I think the two things when I think about him, remarkably, first one is communications and not in the way you might think, because he was so famous for that sort of double speak that nobody could understand. But he really pioneered Fed communications and the communications that we're used to today in hearing from the committee after the meetings. Then the other piece would be his crisis management. He oversaw a number of crises and again, shepherded the economy and the country through them in ways that had not been necessarily normal operations for the Fed.

**Carol Massar** (2:41)
Yeah, it's interesting when we think about his legacy and his standing and that he really did make a mark. I mean, I was curious about things he said more recently in terms of the market environment and I do wonder how he was thinking about the environment where we are in today where we questioned so much whether or not we will have an independent Fed. It's hard to believe that the most revered US central bank globally is having these kind of thoughts or people around it are having these thoughts.

**Betsy Duke** (3:13)
Well, in Greenspan's day, nobody dared challenge the independence of the Fed and quite frankly, nobody on the Federal Open Market Committee dare challenge Alan Greenspan. So things are a lot different today and the independence, I think, I still believe the Fed is going to remain independent.
I've been very much heartened by Kevin Warsh's first statement since he's been there and his first press conference. I think he's made it clear that he's going to certainly carry the flag for Fed independence.

**Tim Stenovec** (3:49)
It's interesting that you went to the Fed independence part of this because up until Greenspan the Fed had been under pressure when it came to its independence. I mean, certainly during the Nixon administration, I think it's fair to say at this point.

**Betsy Duke** (4:05)
Yeah, and certainly Volcker came in at a time when the Fed's lack of independence had really caused difficulty for the country and for the president. So that's the last, I think, example we have of the Fed not acting independently. And it was only when Volcker got there and really decided to move forward and conquer inflation, that since that day, at least, the Fed's independence has been taken as seriously important to the country. Recently, there have been so many challenges to that.
But hopefully, between the courts and also some understanding of exactly how dangerous it is to bring the Fed's independence into question and what that does to markets and investors and our economy in general.