Greenspan’s Legacy

Alan Greenspan is worried about his legacy. When he retired two years ago, he was lionized as the greatest central banker in history. Now, with the economy slipping and the markets in turmoil, St. Alan is in danger of seeing his halo tarnish.

In Greenspan’s defense, many critics look back with hindsight and “forecast” what he should have done four years ago. Where were they when he was making his tough calls? In fact, the low interest rates that helped feed the housing boom were a conundrum, and these persisted long after the Fed began to raise rates.

But one aspect of Greenspan’s leadership that’s rarely examined is the make-up of the Board. One by one strong Governors like Wayne Angell or Larry Lindsay just didn’t stick around. I don’t think Greenspan forced anyone to think his way, but the lack of dissent under him was remarkable. And the resulting group-think that came from consensus-building had its drawbacks. One of which is a legacy of two burst financial bubbles.


Douglas R. Tengdin, CFA
Chief Investment Officer
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