Alan Greenspan has died

https://www.washingtonpost.com/obituaries/2026/06/22/alan-greenspan-most-powerful-central-banker-modern-times-dies-100/

239 262 1 month ago

https://www.cnbc.com/2026/06/22/alan-greenspan-former-chairm...

Greenspan's faith in self-regulation always looked different from outside the US. In East Asia, the 1997 financial crisis was still a living memory when he was at peak influence — countries like Thailand and Indonesia saw firsthand what happens when capital flows move faster than regulatory oversight. The irony is that China watched the Greenspan era and drew the opposite lesson: rather than trusting markets to self-correct, the PBOC built a toolkit of direct interventions (window guidance, reserve ratios, capital controls) that would make a Western central banker uncomfortable. Whether that's prudence or overreach depends on your priors, but it's worth remembering that the 'maestro' reputation was always more contested in capitals that had been burned by the assumptions he championed.

firefax• 1 month ago

Non paywalled obituary: https://apnews.com/article/greenspan-federal-reserve-death-2...

gosub100• 1 month ago

Aside from your attempt to circumvent the supply and demand controls, I find the impact of his contributions highly inflated.

bhouston6• 1 month ago

I'm not a gold bug but Alan was a proponent of the gold standard. He wrote about how the gold standard created responsible spending and more equality in the world:

https://ritholtz.com/2008/11/gold-and-economic-freedom-by-al...

The world we are in now, especially in the US, is one where there is near unlimited government credit but it is, according to many, papering over deep structural problems. At some point, these chickens will come home to roost in some way or another. But it is hard to predict when.

So he was in favour of the gold standard because it prevented massive unconstrained expansion of credit and that seems sensible.

b40d-48b2-979e2• 1 month ago

He also oversaw the economy for twenty years before one of the worst recessions in the world. He helped set the stage for multiple disasters with his policies, so I'd take his opinions with a grain of salt.

bhouston6• 1 month ago

It was generally 20 years of growth and the 2008 banking crisis actually happened after he left.

chollida1• 1 month ago

Really?

I don't think anyone really holds him responsible for the dotnet crash of 2000 as that was a market issue and irrational exuberance issue and not a monetary one.

And 2008 was similar. The Fed doesn't control or have any responsibility for lower lender standards or ARM mortgages.

Congress was responsible for the GSE's that bought any mortgages and wrote insurance on those mortgages, so you can't blame the FED for that.

Wallstreet are their regulators were responsible for the securitization of mortgages that went bad in 2008, not the FED.

At worst you can say they had the wrong monetary policy but that's an opinion and not something that can be said as a fact.

Can you flesh out how you feel Greenspan is responsible for 2008?

jimbokun8• 1 month ago

By the same standard shouldn’t he also get credit for those 20 years of prosperity?

Arodex• 1 month ago

It is well know there weren't deep structural problems at the time of (and caused by) the gold standard...

I don't understand why people keep banging about the theoretical advantaged of a gold standard whan it was the default monetary system for centuries and we have firsthand evidence of the problems it causes (and certainly not more equality in the world!). It has been tried by the whole Earth during several generations.

If you think, like Greenspan and others, that there ought to be a mechanism to force some monetary restraint on governments, try to think of a new mechanism, because the "old way" wasn't better. We know it. Move on.

expedition322• 1 month ago

Nixon was running out of money fast- the cold war was expensive.

throw0101d16• 1 month ago

He wrote about how the gold standard created responsible spending and more equality in the world:

The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active:

* https://en.wikipedia.org/wiki/Gilded_Age

It should also be noted that the gold standard did not bring any kind of price stability:

* https://archive.is/https://www.theatlantic.com/business/arch...

Further, sticking to the gold standard made the Great Depression worse as it reduced flexibility and options of central banks had, and made deflation worse:

* https://www.nber.org/papers/w3488

The sooner countries left the gold standard the sooner they started recovering from the Great Depression:

* https://www.nber.org/papers/w27586

greenavocado• 1 month ago

The Great Depression was caused by France panic hoarding gold https://www.nber.org/papers/w16350

Semi-ironically France was the reason the US fell off the dollar standard after it panic hoarded gold AGAIN when the French government made one last, massive purchase of gold from the US using US dollars, paying $35/oz. A French warship arrived in New York in early August 1971 to load the gold and bring it back to France.

Reckless spending post WW2 was the main reason the US shot itself in the foot and got into this position where they couldn't reasonably pay most clients back and France saw this developing.

All in all France managed to deal massive blows to the US economy covertly TWICE within the same century.

https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?art...

Noaidi5• 1 month ago

The separation of wealth during the Gilded age was caused by the same thing it is caused by today: rapid industrialization. This rapid industrialization began when the US was off the gold standard during the civil war. The 1920's gilded age was fueled by fiat money, the greenback.

The great depression was triggered in part by imbalanced gold flows when we returned to gold back currencies.

https://explaininghistory.org/2025/06/12/golden-fetters-the-...

We are essentially replaying the greenback inflation of the 1860's and have been doing it since 1971.

lesuorac• 1 month ago

Eh, aren't most of those points non-sequiturs?

The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active:

And the Gilded Age [1] ended long before the gold standard. Which makes sense since the Gilded Age is a political issue not a monetary one; how will the productivity from railroads be redistributed?

It should also be noted that the gold standard did not bring any kind of price stability:

A comparison of 35 years against 4?

That's like bragging about how smart private credit is by showing the low volatility in it's price over the past year.

The large concern from gold bugs is that by printing money we just make the next crash even larger. But of course we just print more in the next crash so it doesn't happen. Take a look at the fed balance sheet [2]; under Kaynsian ideology you were supposed to sell that off during the boom years so you can take on debt during the busts but politicians are not disciplined enough to do that so the Gold Standard would've never let them.

---

IMO, the real argument against the Gold Standard is that the US left it is because we spent more money than we made to finance the Vietnam War. If we returned to it, then we'd just leave it again when it became inconvenient. It's not the Gold Standard that needs fixing in the country.

[1] https://en.wikipedia.org/wiki/Progressive_Era

[2] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...

BigTTYGothGF• 1 month ago

The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active

I've got some news for you about modern levels of inequality.

up2isomorphism• 1 month ago

It depends on how inequalities is defined. But from the wealth distribution point of view, today’s wealth distribution skews much more towards the top. Although the lowest living standards improve thanks to the technology advancement.

wonnage2• 1 month ago

There is an idea floating around that trade imbalances create global inequality (Trade Wars are Class Wars by Klein & Pettis) and the original sin was adopting the dollar as the reserve currency instead of something like Bancor (https://en.wikipedia.org/wiki/Bancor)

paulddraper2• 1 month ago

The Gilded Age

Which saw 40% increase in median real wages over 30 years. [1]

It should also be noted that the gold standard did not bring any kind of price stability:

Prices are *475%* what they were 50 years ago, far exceeding price changes under the gold standard.

Further, sticking to the gold standard made the Great Depression worse as it reduced flexibility and options of central banks had, and made deflation worse:

It did make deflation worse. Deflation = Bad is an assumed tenant of modern economics.

The sooner countries left the gold standard the sooner they started recovering from the Great Depression:

By a certain definition. The US did not really leave the gold standard until 1971 (which coincidentally, is when inflation really started to take off).

[1] https://en.wikipedia.org/wiki/Gilded_Age

thegrim33• 30 days ago

The gold standard was used from before the US existed as a country to after the entire country and all cities had been built, and it was driving buggies around on the moon. Seemed to function pretty decently.

laughing_man• 30 days ago

A lot of monopolistic business practices that are illegal today were accepted practice in the Gilded Age, and that has to explain at least some of the inequality.

I feel like the existence of endless almost-free credit rewards gamblers, and when they win, they win big.

brightball12• 1 month ago

39 trillion in debt with no Congressional stomach for...

- spending cuts

- stopping fraud

- figuring out how the net worth of people in Congress increases from hundreds of thousands of dollars to 10s or 100s of millions of dollars

- addressing wasteful and ineffective programs

Given those issues, the only solution will be inflation. The circling the drain moment will hit with the associated welfare programs get a direct staple to inflation itself, so we will spend more to combat inflation, causing more inflation faster.

It's not going to be fun.

conductr8• 1 month ago

This ball is already in motion IMO. Inflation numbers aren’t even believable and It’s already not fun.

bhouston6• 1 month ago

Also please add as an option: raise taxes on the wealthy individuals and corporations back.

https://inequality.org/article/11-charts-tax-wealthy-corpora...

This is really ambiguous:

"- stopping fraud"

And can mean many things. On the right, it often means Somali daycares, on the left it means the underfunding of the IRS so that it doesn't do audits of rich people.

I find this to be mostly a distraction:

"- figuring out how the net worth of people in Congress increases from hundreds of thousands of dollars to 10s or 100s of millions of dollars"

We should ban stock trading by members of the government, the Ro Khanna bill, but while it can be a source of corruption, it isn't a major source of inequality in the US.

This is unclear, can you be more specific as it has different answers based on one's partisan leanings:

"- addressing wasteful and ineffective programs"

I think a lot of the distortion of US policy towards the rich is a result of Citizens United and similar unrestrained lobbying funds.

toomuchtodo7• 1 month ago

There is nothing left (edit: discretionary) to cut, and there is no material fraud. Taxes must go up. Only the top 40% of Americans have any income or wealth to tax (bottom 60% of Americans have no federal tax liability). Or, as you mention, we monetize the debt, print dollars, and burn up the currency value.

https://usafacts.org/government-spending/

https://usafacts.org/answers/how-much-debt-does-the-us-have/...

enragedcacti2• 1 month ago

- stopping fraud / - addressing wasteful and ineffective programs

Good to know that this will be an evergreen argument despite an extremely well-supported project to do just that taking place in the last two years with nothing to show for itself other than hundreds of thousands of deaths.

rawgabbit4• 1 month ago

From what I observe from fraud and corruption witch-hunts, they are nothing more than that. The real fraud is that government that is supposed to serve the people who elected it serves everyone else first.

brightball12• 1 month ago

EDIT: I see several comments suggesting that there is nothing left to cut. I'm not sure how anyone squares that perspective with this federal budget growth chart.

The federal budget over time...

2026 - $7.5 trillion

2020 - $4.8 trillion

2015 - $3.9 trillion

2010 - $3.7 trillion

https://fred.stlouisfed.org/series/FGEXPND

We do not have a tax problem, we have a spending problem. There's no reason that the US federal government shouldn't be able to operate on a budget equivalent of about $4 trillion which was just about the average from 2010-2020. There seems to be quite a lot available to cut.

derf_• 1 month ago

...it prevented massive unconstrained expansion of credit and that seems sensible.

At the height of the Great Depression (1936), some economists proposed The Chicago Plan to separate the provision of credit from the money supply by eliminating fractional reserve banking, giving better control of the increases and contractions of credit, the elimination of bank runs, and a dramatic reduction in debt. There was a recent (2012) paper from the IMF [1] that seemed to find this actually is pretty sensible, although I do not claim to be smart enough to understand all of the implications.

[1] https://www.imf.org/en/publications/wp/issues/2016/12/31/the...

budsniffer952• 1 month ago

Tying the ability to increase the money supply to a metal we have to dig out of the ground is ridiculous.

near unlimited government credit

Really? How do we get some? And, beyond that, what do YOU think the limits should be on increasing the money supply by a sovereign nation?

A nation becomes wealthy by producing things to sell. Nothing else matters, including debt. But, we live in a world where people want to be rich, but also don't want to use resources, or build, or manufacture things, or run an empire. It's contradictory, and we are starting to see the effects.

DANmode• 1 month ago

Tying it to our goodwill, military might, and diplomacy seems like it might be a bad long term plan.

mempko2• 1 month ago

Gold based money, or eras of coinage, historically have been times of war and slavery. The debt system we are in now is far better in a lot of ways. The outcome of what happens depends on the political will deciding where the credit flows.

jimbokun8• 1 month ago

Seems like a non sequitur. What’s the causality of the gold standard leading to slavery?

bko5• 1 month ago

I have come around to gold. Money shouldn't be dual purposes, we should apply single responsibility principal. Money should refer to some stable (albeit slightly growing by nature) account of measure.

Prices should get cheaper. That's a progress dividend. We get better at growing food every year, why shouldn't food get cheaper? Imagine a world in which prices regularly go down. You're a passive beneficiary of technological progress.

The argument that prices can't get cheaper or [bad thing will happen] was never very convincing to me. Prices already do get cheaper for large swaths of the economy that have technological progress grow faster than money supply. Cell phones are rapidly depreciating. You can wait 6m to a year and get a significant discount on the latest iPhone version. People don't stop buying iPhones, and Apple doesn't stop investing in iPhones. This is even more true w/ AI models. Investors/companies are burning billions to build tech that will only get cheaper and obsolete in years if not months.

So if you were to try to convince me that deflation would reduce investment or spending, tell me why this doesn't apply to tech products that get cheaper every year.

ramesh31• 1 month ago

"We get better at growing food every year, why shouldn't food get cheaper? Imagine a world in which prices regularly go down."

Because a lot of people earn their living by producing or selling food. Your other necessities don't become more affordable just because food prices go down, but if that's your livelihood it becomes at risk. Food was incredibly cheap during the great depression. There's an amazing quote from the PBS documentary series on it; "A sack of flour cost a nickel, but where were you gonna get a nickel?". Steady, controlled inflation via fiat is the only way to keep a capitalistic economy functioning, because you can't micromanage or control the price of everything, and people need money to live. The real issue is stagnation of wage growth while assets explode. It's the transfer of real wealth from earners to owners that has put us in the current position, not absolute prices.

throw0101d16• 1 month ago

Prices should get cheaper.

Does that include the price of labour? Are you okay with your salary going down? Because the historical record shows that's what happens during deflationary periods: producers of good/services see the price that they can sell things for goes down, and so they insist on their suppliers and inputs—including labour input—reduce their prices as well.

margalabargala5• 1 month ago

Imagine a world in which prices regularly go down

That world results in a lot of people individually deciding "why buy now, when I can buy for less later" and sitting on their money.

That in aggregate makes the economy much worse.

You're up against human nature here. Money may be an arbitrary numerical denomination of value, but people's behavior around it and how that affects the economy at large need to be accounted for. Having prices slowly creep upwards over time (low inflation) tends to result in more, better things sooner.

triceratops• 1 month ago

We get better at growing food every year, why shouldn't food get cheaper?

It has gotten cheaper, as a percentage of people's income and spending.

chadgpt34• 1 month ago

I suggest a bread standard. It's more useful than gold, and it worked in Brazil.

wwweston• 1 month ago

Tech product price dynamics benefit from a bunch of things that food doesn’t: they’re optional purchases, they’re early stage developments which have more low hanging fruit, and purchase price can be subsidized with later plays (subscriptions, data sales, network effects, freemium to enterprise pipeline).

Also - I think if you look at the data you’ll find periods off the gold standard where food prices grew more slowly than inflation and even wages, ie food becomes cheaper. 80s and 90s for example.

skywhopper2• 1 month ago

If prices get cheaper all the time, there would be no way for anyone to ever borrow money. Tech products like phones used to get cheaper because 1) they start out at a wild markup; 2) they have intense competition by rivals to build the latest and greatest; 3) the ability to make things faster/smaller continued to increase. Those factors are non-existent for most industries, and they are reducing in effect for tech products over time.

OnlyANeurosci4• 1 month ago

I have come around to gold. Money shouldn't be dual purposes, we should apply single responsibility principal.

Gimme all the gold contacts in all of your electronics please, we shouldn't be using gold for those I guess....

wolpoli2• 1 month ago

Recall that real interest rate = interest rate - expected inflation. The goal of the central banker is to keep real interest rate low. If you have negative expected inflation, that sets a lower bound on the real interest rate since interest rate could only go as low as zero. This gives less flexibility for monetary policy to handle crisis and that scares the central bankers.

dessimus• 30 days ago

Prices should get cheaper. That's a progress dividend. We get better at growing food every year, why shouldn't food get cheaper?

This can only really happen if the rate of efficiency gains consistently out pace resource and labor costs, such that the marginal cost of delivering produce to market is flat or decreases for the farmer over time.

chasil• 1 month ago

There isn't enough gold to use as a common currency.

As I understand it, all the gold that has ever been mined would fit in a cube the size of a baseball diamond.

https://www.businessinsider.com/warren-buffetts-lesson-on-go...

Nixon was responsible for ending the silver standard.

https://www.usmoneyreserve.com/news/executive-insights/when-...

https://en.wikipedia.org/wiki/Silver_standard#United_States

lenerdenator• 1 month ago

Responsibility is not something that the current market players want to see, whether it be through the gold standard, reasonable interest rates, or any other mechanism. They'll argue that the next big thing is simply too expensive for that sort of constraint.

RA_Fisher2• 1 month ago

The gold standard and metalism generally, leads to all kinds of unproductive panics bc the quantity of money can’t wisely be adjusted to the situation. It’s a bad trade off, bc it’s well-known in the literature that inflation-targeting works (and that’s the current world-wide central bank policy since 1991).

sokoloff2• 1 month ago

It also can’t be unwisely adjusted to the situation (usually in the form “too much for too long”).

I tend to think the benefits of unbacked currency exceed the downsides, but it’s not exclusively upside.

boppo14• 1 month ago

I always wondered how someone who wrote that could go on to chair the fed with LIRP policies that fueled crazy asset bubbles.

aunty_helen• 1 month ago

There’s no roosting. It’s frog boiling. Every day your money loses value.

That’s why stocks go up, spending goes up and the asset class gets richer. When you peg these to an arbitrary “value” you can see, companies aren’t getting trillions of dollars more efficient, the government isn’t delivering more services and the utility of a business or property hasn’t increased.

onraglanroad• 1 month ago

Have you ever read Bertrand Russell's critique of the gold standard in his essay The Modern Midas? It's in the collection "In Praise of Idleness".

It's worth reading all of them, even if you disagree with most of it.

burnte• 1 month ago

So he was in favour of the gold standard because it prevented massive unconstrained expansion of credit and that seems sensible.

That's because it permanently cripples economies by creating an artificial constraint and pretending it's useful. All it does is create another speculation market in gold and cripple credit markets.

itsamario• 1 month ago

Big picture is credit gives the individual a chance. That occurred in the 80s and since we've have more go from rags to riches than all of history combined.

I hated the system but it's fair. English and the allied forces inherited the western world and nobody was willing to claim it, the king of England gave it to his daughter.

Gold should be revalued but we're entering a phase where America is leaving law and order for law and equity. Essentially WW2 is ending but most never bothered to consider if there's a goal to all the chaos.

bluegatty2• 1 month ago

It's impossible to talk about the supposed benefit of the Gold Standard without saying that it's a completely arbitrary constraint.

Basing currency on a shiny rock is the stupidest idea ever, that only happens to work because it plays into the worst of human convictions, which is egosim around fraud and debasement of currency.

Gold Standards are like very strong medicine with bad effects.

Notably, they would almost assuredly hold back the economy and cause deflationary traps.

The economy needs a bit more currency as it expands and that's that.

stephen_g• 30 days ago

The gold standard makes zero sense. Why should the amount of money the economy needs have any relation to the amount of gold a country holds?

What happens in practice is that you set a conversion rate to account for this, and basically immediately things start to drift further and further out of whack leading to massive distortion. There's a reason the gold standard era was a cycle of big swings of inflation and deflation, with panics, recessions, crashes pretty continually.

It's the same with fixed or pegged exchange rates - you can set it to something reasonable at the start but it will always drift, usually until things are distorted that the system fails. That's why we don't have a gold standard anymore and why fixed exchange rates have all mostly failed and gone away too.

There's just no reason to believe that pegs to commodities or other currencies would ever correspond to the amount of money that the economy needs to be in circulation, so they always fail.

pjmorris• 29 days ago

Margaret Thatcher said "The problem with socialism is that you eventually run out of other people's money."

I feel like the problem that Greenspan, Bernanke, and friends have found is that the problem with capitalism is that you never run out of the government's money.

fouc• 1 month ago

Mostly I just know Alan Greenspan for being a disciple of Ayn Rand back in the 1950s/60s. Though the Objectivists didn't like his work at the federal reserve. In 2008 he admits to being shocked that banks weren't rationally selfish.

lucius_verus• 1 month ago

Related article from around that time: https://www.motherjones.com/politics/2008/10/alan-shrugged/

jandrese2• 1 month ago

The libertarian community really thought they had their fox in the hen house when he was put in charge of regulation, and he did a fair bit of deregulation, but not nearly to the extent that they wanted. In the end it was enough to trigger a major financial crisis, but not enough to completely collapse the world economy and return to the feudalism they wanted.

tennfown• 1 month ago

but not enough to completely collapse the world economy and return to the feudalism they wanted.

Don’t worry, wealthy drug addict pedophiles in Silicon Valley are carrying that torch now.

flumes_whims_• 1 month ago

What regulations did he as federal reserve chair rollback and which of them caused the 2008 crash?

billbrown• 1 month ago

The guy who called the Federal Reserve the "penny in the fuse box" of the economy was not an "Ayn Rand disciple" by the time he took the chairmanship. Power as chair of the Council of Economic Advisers under Ford really transformed him and I think severed the tenuous hold he had on her principles.

roughly5• 1 month ago

The banks were not, the bankers were.

shrubble• 1 month ago

IIRC it was Greenspan that didn’t mean to, but did disclose the use of gold swaps, so even if there is all the gold that is claimed to be in Fort Knox, the question of who owns the gold is unanswered.

zkmon• 1 month ago

"Irrational exuberance" - I came to know about him when he said that around 2001. Kinda foresaw the dotcom bubble.

gertlex• 1 month ago

I'm probably a fair bit younger. I came to know the phrase, then (of) him, through the flash animation of the Happatai/Yatta song on Albino Black Sheep in the early 2000s (and these days on youtube if you search 'irrational exuberance yatta'; mildly nsfw in a few spots). Never bothered to dig into its meaning, though.

hed• 1 month ago

He said it in 1996.

jameszol• 1 month ago

When I was in high school in the 90s, and just discovering the world of money and finance, I stumbled on Alan Greenspan and instantly liked some of his thinking about it. I tried my best to learn from everything he did, read every news article I could find, followed rates, the economics of money, the impact on markets, and more. I learned more about government politics and money and influence from that experience than I have since! I'll admit that my mindset about the Fed and money in general is very much due to what I learned in those impressionable years.

toomuchtodo7• 1 month ago

https://en.wikipedia.org/wiki/Alan_Greenspan

readthenotes1• 1 month ago

Mr "moral hazard"-- as if the people profit(eer)ing faced any...

I've always wondered if part of the 2008 bust was a psyop from his Ayn Rand beliefs.

It probably wasn't as damaging to the world as the Friedman doctrine but it was pretty darn close.

mempko2• 1 month ago

Here is an old clip of Alan Greenspan explaining to Paul Ryan why the social security system can't go bankrupt.

https://youtu.be/DNCZHAQnfGU?is=CWQS-QUJB0z4EfSM

fumeux_fume• 1 month ago

A very Economist answer to Ryan's question. So basically, no.

mediumsmart• 1 month ago

time to watch inside job from 2010 again

kzrdude2• 1 month ago

Greenspan was also the subject in the weird comics "h4x0r economist"/"haxor economist", which thankfully still live on since its early internet days https://www.rdwarf.com/users/kioh/ (NSFW language)

chadgpt34• 1 month ago

I don't get this comic at all but I really miss when random stuff like this got published online!

kzrdude2• 30 days ago

Yeah I think it's very immature and borderline, at least in rearview mirror.

After going through I came back to this tame comic which was the one I remember I actually got a kick out of as really funny back then: https://www.rdwarf.com/users/kioh/haxorec47.jpg (Theme: Greenspan n DnD)

AndrewSwift• 1 month ago

This should be the top comment, at least for today.

thakoppno• 1 month ago

Chaos theory and all but my career in tech doesn’t happen without haxor economist. My Econ major collided with it somehow and a year later ended up with a CS degree.

aj7• 1 month ago

He was proof that the position is a figurehead.

ChrisArchitect• 1 month ago

NYT obituary:

Alan Greenspan, Fed Chairman Through Prosperity and Crisis, Dies at 100

non-paywall: https://www.nytimes.com/2026/06/22/us/alan-greenspan-dead.ht...

helterskelter• 1 month ago

Interesting bit of trivia, Greenspan was in Ayn Rand's inner circle and read her drafts of Atlas Shrugged as it was being written, and they were close friends until her death.

zackmorris2• 1 month ago

Revisionist history will tell it differently, but I remember that from the mid 1990s until about 2000 when the economy was booming yet prices weren't rising, Greenspan publicly indicated that he wasn't sure exactly why that was. Or at least that the information economy had different performance characteristics than the industrial economy, since production wasn't limited by supply but by worker productivity multipliers.

Why did the cost of living decrease in the 90s but not today? What was different then vs now? Well, after the Dot Bomb and 9/11, the US hasn't followed macroeconomic principles (the main principle being to raise interest rates during increased production to prevent inflation), examine the flip after 2000:

https://www.linkedin.com/posts/richard-clarida-085777125_wea...

Breadcrumbs:

https://financialpost.com/news/alan-greenspan-dies-at-100 (alternative article)

https://www.federalreserve.gov/boarddocs/speeches/1999/19990... (example speech)

https://www.dallasfed.org/~/media/documents/research/swe/200... (analysis pdf)

Note that policy had a greater effect on US economic decline than who the Fed chair was. Specifically, the Gramm-Leach-Bliley Act (GLBA) known as the Financial Services Modernization Act of 1999 (which reversed the Glass–Steagall Act of 1933 and removed barriers in the market among banking companies, securities companies, and insurance companies) allowed investors to gamble with our savings again like before the Great Depression:

https://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

The Housing Bubble popped less than a decade later in 2008.

The Telecommunications Act of 1996 had deregulated the information economy, cementing the duopolies we see today, although the fallout from that arguably wasn't felt until after the arrival of fast mobile internet that coincided with the 2008 financial crisis, which contributed to the high communications prices we pay today vs the rest of the world (imposing a kind of privatized tax on the information economy):

https://en.wikipedia.org/wiki/Telecommunications_Act_of_1996

What I saw then was the last hurrah of US colonialism, which patterned itself off of England but used proxy wars instead of direct colonization. Loosely, keeping Asia down supported western antisocialist goals while simultaneously bolstering capitalist economies. In other words, buying shoes for $5 and selling them for $100 (times everything) allowed the US to transition from blue collar to white collar work.

That resulted in the US closing 100,000 factories under the GW Bush administration of the 2000s. And also outsourcing to China and India, the reduction of pure R&D to almost nothing, massive investment in McMansions and SUVs instead of something like renewable energy, and of course diverting perhaps $3 trillion or more to forever wars in the Middle East to prop up the declining industrial economy which depends on fossil fuels.

That's all changing now as China's buying power is passing that of the US:

https://www.capitaleconomics.com/blog/china-versus-us-size-s...

They don't want to make our stuff for pennies on the dollar anymore, and the US can't carry its own weight without massive reeducation and retooling.

But since the US wasted $40 trillion on its national debt instead of investing in the 21st century economy we thought we are going to get in the 90s, we now see prices increasing in parity with wages. In other words, nearly all excess labor productivity goes towards paying the debt ran up by the previous generation. Thomas Jefferson warned against this:

https://www.meteor.iastate.edu/gccourse/develop/jefferson.ht...

The young are paying the elderly's retirement while being told to eat less avocado toast.

The reason I'm writing this is that the powers that be will try to tell you that we need to cut government spending and taxes to outrun our economic decline. But if you understand everything I just wrote, then you'll see that the damage of 40 years of trickle-down economics and austerity has already been done.

The way out of this is self-evidently to try new approaches favored by the youth who are doing the work but not seeing the benefits like previous generations did. We're living in a second Gilded Age dominated by wage slavery and high wealth inequality:

https://en.wikipedia.org/wiki/Gilded_Age

The way we overcame that was to do the opposite of everything you see the establishment promoting today:

https://en.wikipedia.org/wiki/Progressive_Era

The low-hanging fruit is getting money out of politics (reversing the Citizens United decision), closing the revolving door between the government and lobbyists, antitrust enforcement, and other popular goals.

But real progress looks like FDR-style New Deal taxation on the ultra-wealthy to pay down the public debt, forgiveness of private debts incurred by artificially inflated costs (jubilee) and public funding of the commons (education, healthcare, the energy and communications grids, anything that results in natural monopolies).

Greenspan wouldn't have liked what I just wrote at the end there. But he would have supported the ending of intergenerational debt IMHO. That's why I think it makes a good target for today's youth, when they need a litmus test for deciding whether voting for a proposed policy is in their best interest.

npunt• 1 month ago

Just want to say I appreciate the effort that you put into this. I know HN sometimes doesn't vote up the big posts but if they're well researched and follow a thought through to a conclusion, I think they're a valuable addition to the discussion. cheers

zackmorris2• 29 days ago

Thanks, that means a lot. I cringe after posting this stuff, caught somewhere between ego and soul. But I agree with you that having a written record of our experience is important.

And I realized after sleeping on it that it's not good form to pontificate when someone passes. For that I am sorry. For what it's worth, I thought highly of Greenspan for his tendency to resist outside pressure, and wish that we had more adults in the room today.

N_Lens• 30 days ago

But how will we get Quadrillionaires if you keep talking like this?!! /s

Oanid• 27 days ago

You provided a lot of great information in your comment, thanks.

alberth• 1 month ago

For many Americans, Greenspan was the only Fed Chair known widely by name by the general public.

NoboruWataya• 1 month ago

I'm not from the US and was born after Greenspan took up the position but I thought Paul Volcker was a pretty well known name during his tenure?

rootusrootus• 1 month ago

Maybe GP meant Americans alive today. Volcker is probably memorable mostly to an age bracket swiftly shrinking.

unregistereddev• 1 month ago

During his tenure, yes. Volcker remains famous among finance nerds, because it turns out he was right. He caused a recession and risked his own job, but in doing so he successfully reigned in runaway inflation.

While Volcker was controversial in his time and celebrated later, Greenspan was widely respected in his day. I remember Greenspan being sought for interviews national television to help explain finance topics to the general public.

FabHK• 26 days ago

There's a fairly obscure T-shirt designed by FT Alphaville that just cryptically says "Allen, Ben, Janet, Jay" ;-)

pjs_• 1 month ago

Highly recommend the extremely good multipart documentary All Watched Over By Machines Of Loving Grace by Adam Curtis for a fun and wide ranging if slightly silly look at the nexus of Greenspan, Ayn Rand, Silicon Valley, computer technology etc

boppo14• 1 month ago

How did a guy who wrote that "gold and economic freedom" wind up running two decades of LIRP?

collabs• 1 month ago

I am so confused... so he was a proponent of gold standard but also supported low interest rates and the "Greenspan PUT"?

twoodfin2• 1 month ago

My favorite bit of Greenspan lore:

Texas Senator Phil Gramm (pretty sure it was him) was a prominent GOP member of the Senate Banking Committee. Of course, Greenspan often testified there.

Gramm would always ask Greenspan, along with his other questions, “Mr. Chairman, what’s the ideal capital gains tax rate?”

Greenspan never missed a beat: “Zero.”

Agree or disagree, you always knew where he stood!

franktankbank• 1 month ago

HILARIOUS!

KingMob• 30 days ago

Agree or disagree, you always knew where he stood!

This is always such a weird phrasing to me. We collectively praise politicians for this (and admittedly, many of them will just say anything to get elected), but the phrase discourages the idea that learning and changing your mind is valuable.

(Not trying to single you out, just writing about how we collectively do this. I'm sure I've done it in the past.)

twoodfin2• 30 days ago

The phrasing was indeed trite.

The anecdote was intended to highlight the directness of his answer rather than the constancy of his position.

lowbloodsugar• 1 month ago

This is the guy who told everyone to save money by buying property with ARMs and then, post crash, admitted to congress that there a flaw in his economic theory. No shit.

love0972• 30 days ago

He shaped global monetary policy for nearly two decades. His 2008 admission that his free-market ideology had a "flaw" was one of the most honest moments in central banking history.

rkrbaccord• 28 days ago

Je crois et en effet tandis: enfin l'art de raffiné fe reduit language bien faire.

Mon ouvrage s'es transforme infenfiblement entre mes mains, dans qi'il m'ait été.

[0]: Lavoisier, Traité élémentaire de chimie : présenté dans un ordre nouveau.

Alan Greenspan has died

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