Alan greenspan, chairman of the Federal Reserve Board, is the second most powerful man in the US. He is also the most widely respected figure in American public life, whose every utterance attracts national attention. His influence has grown to the point where he exercises an unofficial veto over US economic policy. Shortly after taking office, he was credited with mitigating the fallout from the stock market crash of October 1987. Subsequently, he has been praised for curbing inflation and guiding the economy through its longest period of growth this century. He presides over the “Goldilocks economy”-not too hot, not too cold-and receives extravagant praise from politicians of both parties.
“America’s leading economist,” as the Fed chairman is sometimes called, never actually pursued an academic career. Born in March 1926, Greenspan was raised by his mother in the impoverished neighbourhood of Washington Heights, Manhattan, after his stockbroker father left home. During the war, he studied music at the Juilliard School in New York, and later played clarinet and saxophone in a jazz band. Subsequently, he took a degree in economics at New York University, but dropped out of his doctoral programme in the early 1950s. For the next 20 years, he earned his living as a consultant economic forecaster, inhabiting a grey area between the formal science of economics and quackery. During this period he belonged to the circle of Ayn Rand, the Russian ?migr? novelist (author of The Fountainhead and Atlas Shrugged). Miss Rand preached a gospel of laissez-faire derived from the Austrian school of economists, in particular Ludwig von Mises. She described herself and her followers as “radicals for capitalism.”
Reversing traditional Christian nostrums, the militant atheist Rand believed that money was both “the root of all good” and “the barometer of a society’s virtue.” She castigated the coercive altruism of the welfare state, maintaining that “altruism is not a doctrine of love, but of hatred for man.” Her philosophy, which she called “Objectivism,” is characterised by a profound distrust of government intervention in the economy. The state should confine its activities to the protection of the individual from external acts of violence. In an essay entitled “Notes on the History of American Free Enterprise,” Rand wrote: “Government control of the economy… has been the source of all the evils in our industrial history-and the solution is laissez-faire capitalism, i.e. the abolition of any and all forms of government intervention in production and trade, the separation of state and economics, in the same way and for the same reasons as the separation of church and state.”
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