GREENSPAN'S AGE OF TRANQUILITY
September 19, 2007
Alan Greenspan has called his memoir "The Age of Turbulence," but a more accurate title might have been "The Age of Tranquility," says columnist Robert J. Samuelson. During his long tenure as chairman of the Federal Reserve Board (from August 1987 to January 2006), the U.S. economy suffered only two modest recessions -- those of 1990-91 and 2001 -- totaling 16 months. Otherwise, here's what happened:
- The economy (gross domestic product) grew 70 percent from 1987 through 2005.
- The number of nonfarm jobs increased 31.4 million, or 31 percent, with average unemployment of 5.6 percent.
- Annual inflation as measured by the consumer price index averaged 3.1 percent.
- Pretax corporate profits jumped from $369 billion to $1.33 trillion.
- The stock market quadrupled, with the Standard & Poor's 500-stock index rising from 287 (the 1987 average) to 1,207 (the 2005 average).
Greenspan's reputation rests on this astonishing record. To be sure, job growth was sometimes sluggish, and there were scary moments -- the scariest being the 22.6 percent drop in the stock market on Oct. 19, 1987. But mainly, Greenspan presided over one of the greatest surges of U.S. prosperity ever, says Samuelson.
Source: Robert J. Samuelson, "Greenspan's Age of Tranquility," Washington Post, September 19, 2007.
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