Alan Greenspan, Former Fed Chair Who Steered the U.S. Economy for 18 Years, Dies at 100

Alan Greenspan — the man who ran the U.S. Federal Reserve for nearly two decades — died Monday at 100. If you've ever taken out a mortgage, watched your 401(k) boom in the late '90s, or felt the gut-punch of the 2008 financial crisis, his fingerprints are all over your financial life.

Greenspan, who served as Federal Reserve chairman under four U.S. presidents, died at his home from complications of Parkinson's Disease, according to his wife Andrea Mitchell. Mitchell called him "a giant of a man who helped shape the U.S. economy for decades under presidents of both parties, but was always honest in acknowledging his mistakes."

Who was he, really?

Greenspan helped define modern American capitalism from the final years of the Cold War era through the dawn of the digital age. Before he ever ran the Fed, he was a jazz musician — Greenspan played the clarinet and saxophone and briefly attended the Juilliard School. He eventually turned to economics, and the rest, as they say, is history.

Greenspan was appointed Fed chairman in 1987 by President Ronald Reagan and held the position — through busts and booms — until retiring in 2006. His tenure was the second longest, four months short of that of William McChesney Martin, who presided over the central bank from 1951 to 1970.

The good years

President Ronald Reagan tapped Greenspan to run the Fed in 1987, and he was tested almost immediately. On Oct. 19, 1987 — "Black Monday" — the stock market suffered the worst one-day percentage loss in American history just two months into his term. Greenspan was credited for helping restore stability, assuring Wall Street that the Fed would supply as much money to the financial system as needed to restore calm — and stocks recovered, with the American economy emerging unscathed.

From there, his reputation only grew. During his time at the Fed, the U.S. economy experienced one of the strongest peacetime economic expansions in its history. Unemployment fell below 4%, the stock market reached record highs, and the federal government began running budget surpluses rather than deficits. For the average American, this was the era of a booming stock market, a tight job market, and relative stability. Greenspan became so influential that he became known as "the Maestro" and famously warned of "irrational exuberance" — a phrase he used to caution that stock prices were getting dangerously inflated.

Then came the crash

Here's where it gets complicated — and personal. Greenspan's legacy is linked to the 2008 global financial crisis and the ensuing Great Recession, although the economic collapse occurred after he ended his final term as Fed chair in early 2006. The low interest rates Greenspan had engineered helped swell housing prices into a dangerous bubble, and the financial deregulation he supported allowed banks and other financial firms to pile up huge risks, often hidden from government supervision.

In 2011, the bipartisan Financial Crisis Inquiry Commission determined that the crisis was triggered in part by Greenspan's failure to discourage trade in securities backed by subprime mortgage loans amid an unsustainable housing boom and his promotion of financial industry deregulation. Millions of Americans lost their homes, their savings, and their jobs.

To his credit, Greenspan didn't dodge it entirely. He later acknowledged, "I made a mistake" in assuming that banks could essentially regulate themselves.

Why it matters to you now

Greenspan's death isn't just a history lesson. Greenspan was one of the few Fed chairs that Kevin Warsh, chosen by Trump to lead the Fed, praised at his swearing-in — and Warsh has said one of his goals is to dial back the Fed's communications, an approach closer to Greenspan's than to his immediate predecessors. In other words, debates about how the Fed operates and communicates with markets — debates that directly affect your mortgage rate and retirement account — are very much alive, and Greenspan's model is part of that conversation right now.