In his nearly two decades as chair of the Federal Reserve Board, Alan Greenspan—“the maestro,” as he was known in his heyday in the 1990s—became the most influential economic policymaker in the world and arguably the world’s most important economist. Mallaby’s masterful biography—which doubles as an excellent economic history of the past three decades—tells a story of Greenspan’s technocratic ascent, from his modest boyhood in New York City, to a young adulthood colored by his philosophical attraction to the antigovernment libertarianism of the novelist Ayn Rand, to his career as a high-flying economic consultant, and finally to his rise to the pinnacle of power at the Fed. But the maestro’s reputation suffered a severe blow in the wake of the financial crisis of 2008, which many blamed on policies that Greenspan had developed and applied. Greenspan later admitted that he was blinded by his faith in the idea that the world of private finance was led by rational individuals fully aware of the risks they were taking—a system that he wrongly believed could essentially regulate itself. Throughout his career, Greenspan proved politically astute, reluctant to take on any battle that he could not win, which perhaps explains some of his hesitation to confront the dangerous asset bubble that was obviously building during the early years of this century.
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