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Based on unprecedented access to Greenspan's family members and to such peers as Henry Kissinger, Gerald Ford, and Milton Friedman, Greenspan: The Man Behind Money breaks new ground. It spans his hardscrabble childhood in depression-era New York City, his famous decades-long friendship with Ayn Rand, his Juilliard education and days spent touring with Henry Jerome's jazz band, as well as his two marriages and service to five presidents.
Author Justin Martin also delves into Greenspan's training as an economist -- from his early exposure to Keynesian theory to his tutelage under the legendary Arthur Burns. While tracing Greenspan's emergence as a power broker of the first order, he captures in gut-wrenching, behind-the-scenes detail the numerous economic crises that he has confronted -- from New York City's near bankruptcy in 1975 and the Crash of '87 to the perilous Asian Contagion in 1998.
This intimate biography explores Greenspan's mercurial relationship with President Bill Clinton, a result of the Fed chairman's unwillingness to bend with the political winds. It also exposes his stormy tenure with President George Bush and, in stark contrast, the close friendship he developed with Gerald Ford. Greenspan: The Man Behind Money provides rare insight, too, into the inner workings of the highly secretive Federal Reserve along with discussion of Greenspan's central role in America's longest-ever economic expansion. What emerges is a full and fascinating portrait of one of the most influential men of our time.
A few years prior to the great stock market crash of 1929, Alan Greenspan's parents moved into an apartment in the Washington Heights section of Manhattan. The area is so named because it offers the highest natural elevation on the island, and as a consequence, General George Washington chose it as the site of his headquarters during some key Revolutionary War battles. For decades thereafter, Washington Heights remained a surprisingly rural part of New York City, containing only a handful of large country estates, including one that belonged to the naturalist John James Audubon.
The colonization of Washington Heights began in earnest in 1906 with the completion of a subway line. Soon after, people intent on escaping the teeming slums of Manhattan's Lower East Side began moving uptown in search of larger apartments and better living conditions. Then in the 1920s, when flush times sparked a boom in housing and construction in northern Manhattan, new residents flooded in.
The section came to be known as "Frankfurt on the Hudson," a term of mild derision that served to point to the considerable number of Jewish immigrants from Germany who called the neighborhood home. The area also became home to large pockets of Irish and Greek immigrants.
Into this thriving community at the northern end of Manhattan, Alan Greenspan was born on March 6, 1926. He weighed nine pounds. His father, Herbert Greenspan, was a businessman who later became a stockbroker and economic consultant. He was medium in height,slender in build, and bore a decided resemblance to the movie star Gene Kelly. Alan's mother, Rose, was a petite, dark-haired woman, possessed of an innate sweetness and natural optimism. In keeping with the times, Rose was a full-time homemaker.
Herbert Greenspan's forebears hailed from Germany. Rose, née Rose Goldsmith, was of Polish descent. Nathan and Anna Toluchko—Rose's parents—had come to the United States at the beginning of the twentieth century and had Americanized their name at immigration services, changing it to Goldsmith. Rose came from a large family of seven siblings, all born in the United States, except for the oldest sister, Mary, who had been born in Poland.
Young Alan's parents had a tumultuous marriage. It was generally agreed that the couple had wed too young, when Rose was just seventeen. They were mismatched in temperament as well. Herbert was something of a dreamer, given to aloofness and abstraction, while Rose was vivacious, brimming with energy and zeal.
The young couple were already at odds, but it was the crash of 1929 that sealed their fate. During the ensuing depression, money was tight in the Greenspan household, causing financial anxieties that served to drive the two further apart.
When Alan was five years old, Rose and Herbert divorced. Rose took Alan and moved back in with her own parents, strict disciplinarians with old-country values and manners. The four lived together in a one-bedroom apartment in a six-story red brick building at the corner of Broadway and West 163rd Street—600 West 163rd, to be exact. Conditions there were extremely cramped. Nathan and Anna Goldsmith slept in the bedroom, while Alan and Rose shared a dining room that was converted into a second bedroom.
To help make ends meet, Rose took a job in the domestics department at Ludwig-Bauman, a furniture store at 149th and Third Avenue in the Bronx. Following the divorce, Herbert became very distant. Visits to his son were infrequent at best. "He disappeared from their lives very fast," recalls cousin Wesley Halpert. "Alan hardly got to see him. But I do remember the ecstasy that Alan exhibited on those rare occasions when his father visited."
Wesley and Marianne Halpert, the children of Rose's sister, Mary, lived half a block away from Alan. Alan spent a great deal of time with his cousins, and they grew as close as siblings. Wesley was older, Marianne younger. Their father, Jacob Halpert, became almost like a second father to Alan. An insurance broker by trade, Jacob managed to enjoy a fair amount of success during the Great Depression. Wesley recalls an aching and almost boundless neediness on the part of his cousin.
"Here was my father," says Wesley. "He was one father with two hands. But there were three kids: Alan, Marianne, and myself. We'd be walking down the street and Alan would kind of worm his way between me and my father and grab my father's hand."
Wesley also remembers that Alan would periodically pipe up and sing "Brother Can You Spare a Dime?" Little Alan's mournful rendition of the popular tune and unofficial anthem of depression-era America was guaranteed to tug at Jacob Halpert's heartstrings. Invariably, he'd dig into his pocket and toss Alan a dime.
As a young child, Alan showed a precocious intelligence. By the age of five, he was able to add up three-digit numbers in his head. His mother often trotted him out to do this trick to impress guests and neighbors.
His intellect served him in grammar school as well when he attended P.S. 169 at 169th Street and Audubon Avenue. He excelled as a student, reading at a level ahead of his classmates and memorizing multiplication tables in a snap. "Alan was good at everything he did," recalls Stanford Sanoff, a boyhood friend.
He adds that Alan was well behaved and polite even at an early age: "I never knew Alan to get into any trouble at all. He was a straight arrow right down the line."
At P.S. 169, one of Greenspan's teachers was a Mr. Small. Small brought pragmatism to teaching mathematics, taking the students on some unusual field trips. "He made it very interesting," Bill Callejo, another of Greenspan's childhood friends, recalls of Small. "He had us go down to banks and get copies of deposit slips as an introduction to math."
During summers, Greenspan and other neighborhood boys played sandlot baseball on a team they called the Titans. As a left-hander, Greenspan was naturally called upon to play first base. He modeled himself after Dolph Camilli, a slugger for the Dodgers who played the same position. Although Washington Heights was Yankees territory, Greenspan's heart lay with their crosstown rivals in Brooklyn. Growing up, his other favorite players were Dodgers shortstop Pee Wee Reese and third baseman Cookie Lavagetto. He even developed an extraordinarily complicated system for scoring ball games that he listened to on the radio, with intricate notations identifying the type of pitch thrown, the exact location to which the ball was hit, and so on.
In the summertime, Greenspan spent many happy weekends at the Halpert family's beach house in the Rockaway section of Queens. "We'd go beachcombing to find coins that had been dropped in the sand," says Wesley. "We were good. We did it without using machinery or anything. We'd just walk along the beach looking. Then we'd go buy candy."
The two boys also indulged an appetite for horror films. Just up the street from the Goldsmiths' apartment was the Audubon Theater, where Wesley often took Alan to the movies. This was the heyday of classic monster films starring Boris Karloff and Bela Lugosi. "I took Alan to see Frankenstein," recalls Wesley. "He was terrified."
When Alan was nine, his father—in the course of one of his increasingly infrequent visits—gave him a copy of a book that he had recently published called Recovery Ahead! It was a defense of Franklin D. Roosevelt's New Deal, in which he argued that government programs could help spur the economy out of depression. The book bore the following inscription from Herbert Greenspan to Alan Greenspan: "May this my initial effort with a constant thought of you branch into an endless chain of similar efforts so that at your maturity you may look back and endeavor to interpret the reasoning behind these logical forecasts and begin a like work of your own. Your Dad."
Young Alan put the book away and it was soon forgotten—he would not get around to reading it until years later. Already, he was moving in a direction that would take him about as far from economics as one can get.
Both the Goldsmiths and Halperts were very musical families. Nathan Goldsmith—the grandfather with whom Greenspan lived—was a cantor at a Bronx synagogue; Alan's mother, Rose, loved to play the piano and sing, belting out Cole Porter and Jerome Kern songs as well as novelties such as "The Big Brown Bear Went Woof." Her style was loose and energetic, reminiscent of the chanteuse Helen Morgan. She also worked some Yiddish songs into her repertoire, such as "Rozhinkes mit Mandlen" (Raisins and Almonds).
"Rose was such a vibrant, lively, lovely lady," recalls Alan's cousin, Claire Rosen. Claire grew up to be a professional singer, specializing in musical comedies. She worked various Radio City revues and during the mid-1940s appeared in the original Broadway production of Annie Get Your Gun, starring Ethel Merman.
And then there was Uncle Mario, born Murray Toluchko. First, his name was Americanized to Murray Goldsmith, then Murray Smith, and finally he changed it to Mario Silva. A small, round man with a swarthy complexion, he wanted to pass for Italian and hoped to build a career in the opera. Silva wrote a play that actually appeared on Broadway, called Song of Love, about the composer Robert Schumann.
Surrounded by all this passion for music, young Alan had no alternative. He chose the clarinet as his instrument.
From the time he was very young, Greenspan showed an idiosyncratic but highly developed sense of morality. During the mid-1930s, when he was just ten or eleven years old, he and his friend Bill Callejo founded a secret society called the Detective Scouts of Washington Heights. The two boys had a vague sense that something was amiss in the world, and they planned to do something about it.
Prohibition was then in full force, spurring all kinds of gangland activity. In Manhattan, District Attorney Thomas Dewey—hard-boiled predecessor to Rudolph Giuliani—was busy prosecuting racketeers and crime syndicates such as Murder Incorporated. Meanwhile, unsettling news from Germany continually filtered into the boys' Washington Heights neighborhood. Alan and Bill didn't understand the specifics, but they knew they wanted to help clean up a world that seemed to be going increasingly mad.
The two devoted an entire afternoon to designing their Detective Scouts of Washington Heights ID cards. Greenspan derived great pleasure from printing in tiny letters; into adulthood, his handwriting would remain unusually small and rococo. He filigreed the ID cards with all kinds of slogans and secret codes and symbols. By the end of the after noon, Alan and Bill had drawn up impressive secret-agent credentials.
"We wanted to ferret out evil," recalls Bill Callejo with a laugh. "It was just one of those things kids dream up with their wild imaginations. I think we wound up being the only two members of the damn thing."
Greenspan attended Edward W. Stitt Junior High School at 164th Street and Edgecombe Avenue in Manhattan. He was placed in rapid advanced classes and managed to skip a grade, completing the seventh-through ninth-grade curriculums in two years.
Classroom seating was done by height. At the back of the class sat the very tallest students. Greenspan and Callejo filled in the second-to-last row. Greenspan was sprouting up. Surprisingly, he was not a gangly, spastic beanpole. He was actually rather well built and athletic, quite out of keeping with his image of later years.
It was during junior high that Greenspan developed a crush on a girl named Corinne Eskris. "All the kids knew it," recalls old classmate Leila Kollmar—Leila Ross at the time. But she's not certain that Greenspan ever even approached the object of his affections. "He didn't talk much," says Kollmar. "He was a very quiet person."
In these years, Greenspan also began to show real signs of aloofness—a bequest of his father and unquestionably one of his own defining traits in adulthood.
"He had a classwide reputation for being a little snobbish," recalls Callejo. "I think it was coming from the fact that he was an introspective person." Sanoff agrees that "he was a thinker even at that age."
One way Greenspan asserted his intellectual independence was by refusing to be bar-mitzvahed. Although he was never to renounce his heritage, he was moving away from religious practice, and for the rest of his life, he would be what is sometimes called a "secular Jew."
"It may have been our grandparents who turned him off," says Wesley Halpert. "Our grandfather had certain authoritarian ideas. Children should be seen, not heard. Our grandmother was a very nervous person. She would get hysterical." Halpert also remembers that "Alan estranged himself from them in the same apartment. I remember many times being over there and he'd be in the bedroom, door closed, listening to the radio. He totally separated himself."
Rose, by contrast, was very lax. "She put no pressure on him and left him to his own devices," says Wesley Halpert.
In the autumn of 1940, Greenspan entered George Washington High School. The school's most prominent feature is a high tower that offer's a stunning panoramic view, sweeping up and down Manhattan, into the Bronx and Queens, and across the Hudson to New Jersey. Throughout his junior-high years, Greenspan had been privy to adolescent rumors about the tower. Supposedly, it was a venue for unimaginable acts by lust-crazed high-school girls. Thus was the school nicknamed "The Whorehouse on the Hill."
Upon arriving at George Washington High, however, Greenspan found the tower being put to very different use. It was occupied by armed members of the U.S. Navy. At the top of it, they had positioned a powerful telescope. The site offered a great vantage point from which to survey the Hudson and Harlem Rivers. There was concern that a German U-boat might sneak up one of those waterways. The evils that the Detective Scouts had vowed to fight were becoming all too pressing and ominous at a time when America was on the brink of war.
Between 1933 and 1941, 20,000 German and Austrian Jews poured into Washington Heights, fleeing the Nazis. In 1938, among them was a young boy named Heinz Alfred Kissinger, who arrived from the Bavarian village of Fürth. He changed his name to Henry and lived with his family in a cramped little apartment on West 187th Street, not far from Greenspan.
Kissinger attended George Washington High two classes ahead of Greenspan. Their time at the school overlapped, but they did not meet one another until many years later. Kissinger actually attended school at night, an option in that era. By day he worked as a delivery boy for a shaving-brush manufacturer, earning $10.89 a week, $8.00 of which he gave to his parents. Despite a backbreaking schedule, Kissinger made straight A's and hoped to become an accountant.
Greenspan was also a good student, though he didn't manage straight A's. Among his favorite courses were history and current events. He was also a real joiner during high school. He was president of his home room, class 8-1, and served in a group known as lunch squad. George Washington High was extremely crowded during the early 1940s, mainly due to the massive influx of new immigrants. Lunch squad's main duty was to break up numerous fights that occurred in the cafeteria.
Greenspan played clarinet in the school orchestra, sporting a blue sweater emblazoned with a white "GW." He was also a member of a school dance band organized by classmate Hilton Levy. The band went by the name Lee Hilton and His Orchestra—"Lee Hilton" being young Hilton Levy's stage name.
Levy was extremely entrepreneurial. He managed to finagle a letter of introduction from bandleader Glenn Miller and, armed with this letter, Levy would case the Brill Building—the famous song-writing factory in Times Square—wandering from floor to floor, hitting people up for free sheet music for the band. Thus, Lee Hilton and His Orchestra's repertoire included standards such as "Bye Bye Blackbird," "Wait Till the Sun Shines, Nellie," and "Sweet Georgia Brown." In deference to their benefactor—and also because it was a huge crowd-pleaser—the orchestra ended each show with Glenn Miller's "In the Mood."
Levy, Greenspan, and an ever-changing roster of anywhere from seven to ten musicians played school dances and proms at George Washington High. They also tooled around their neighborhood performing at socials held by temples and churches. Standard pay was $2 a show per band member.
Levy, who remained in the music business for many years, and legally changed his name to Lee Hilton, remembers bandmate Greenspan as rather abstruse. "He never said anything definitively. It was always double-talk—very much like today." But he also remembers that they had a good time together. "We thoroughly enjoyed what we were doing, and we were getting paid for it," says Hilton.
As one might expect, Greenspan didn't get into much trouble during high school and didn't exactly run with a rowdy crowd. Besides, this was the 1940s, a time long before the advent of malls and cineplexes. Nevertheless, Greenspan enjoyed frequenting a candy store near George Washington High, renowned for its chocolate egg creams, and he put in occasional appearances at a spot in Riverside Park where neighborhood kids congregated—known simply as "the wall."
"We used to say, `I'll meet you at the wall,'" recalls Sanoff. "It was just a place to meet. There was nothing much to do. You have to remember, this wasn't the same world as today, with fast food restaurants and such."
In general, Greenspan's classmates found him quiet and reserved. "I think Alan and I were a little more concerned about towing the line," adds Sanoff. "If we were expected to be home Saturday night by midnight, we were home by midnight. Somebody else might come in at 3 A.M. and not care."
During his teens, Greenspan continued to spend long stretches of the summer with his cousin Wesley Halpert. By this time, the Halperts had a beach house on Lake Hiawatha in New Jersey. At night, all the kids would congregate at the Blue Front Diner, where Greenspan could be counted on to cue up Glenn Miller and various other swing bands on the jukebox. He loved to dance the lindy-hop and, as his cousins recalled, was surprisingly graceful.
Lake Hiawatha was the place that Greenspan had the most luck with meeting girls, more so than at George Washington High. "As I recall, during the summers he had more dates than me," says Halpert. "He always selected girls that looked like his mother."
Outside of school, Greenspan was growing increasingly serious about music. He was beginning to entertain dreams of playing professionally. To supplement the instruction he received at George Washington High, he began taking lessons from Bill Sheiner, one of the leading music teachers in New York City.
Sheiner was a multi-instrumentalist, fluent in the clarinet, saxophone, flute, and oboe. Lessons were held in a studio behind the Bronx Musical Mart at 174th Street and Southern Boulevard. Besides providing music instruction, Sheiner also did session work with a variety of popular orchestras.
Most students who worked with Sheiner were "doublers," meaning that they were trying to learn two similar instruments. Greenspan's were clarinet and saxophone. In teaching him, Sheiner employed a couple of books that are still standard texts: The Universal Complete Saxophone Method and Klosé Complete Clarinet Method.
"Bill did not have the ability to teach creativity. Very few do," says Ron Naroff, a music teacher who took lessons from Sheiner during the 1940s. "But guys who worked with him—provided they had stolid study habits—were guaranteed to become good players. They'd be able to play with anyone."
In fact, a variety of notable musicians used Sheiner's vigorous instruction to lay the foundations of their careers, including Lenny Hambro, Red Press, and Stan Getz. Through Sheiner's lessons, Greenspan and Getz actually got to know one another and grew friendly. Both had similar backgrounds—Getz's family was also lower middle class and Jewish. His family lived on Hoe Avenue in the Bronx, where Getz attended James Monroe High School; his father was a printer who often had trouble finding work during the Great Depression.
Greenspan and Getz took to hanging around together, trading licks on the saxophone. They also engaged in fevered discussions about their idol, Benny Goodman. Greenspan was one year older than Getz, but in terms of musical talent, Getz was light years ahead. He was first to take the plunge into the music business, dropping out of school at age fifteen to join Jack Teagarden's orchestra. Getz eventually became one of the most important figures in jazz history, revered for a trademark breathy saxophone style at once lushly romantic and restlessly experimental. His 1963 single "Girl from Ipanema" was a crossover sensation and one of the biggest pop hits of all time.
Despite a love of music and dreams of going pro himself, Greenspan stayed in school. He graduated from George Washington High in 1943, a member of the Arista honor society and recipient of a special citation from the school's music department. His photo in the yearbook shows him looking suitably serious, hair combed back in a mild pompadour, a popular look of the time.
Beneath his picture is a quote that reads: "Smart as a whip and talented, too. He'll play the sax and clarinet for you."
|4||Rand and the Collective||35|
|8||"Whip Inflation Now"||95|
|12||The Crash of '87||171|
|13||It's the Economy, Stupid||187|
|15||The Cult of Greenspan||221|
Posted December 12, 2012
Posted April 26, 2003
Overall I think the book did a mediocre job of telling us about Alan Greenspan. The strong points of the book were the author¿s description of Greenspan¿s childhood, his early experiences with music, and his relationships with the presidents. Unfortunately, there were more weaknesses than strengths in the rest of the book. First of all, a great deal of time was spent talking about Ayn Rand, Objectivists and Greenspan¿s lifelong role in that movement. However, after all the print given to this topic, I am not clear on what an Objectivist is, why Greenspan was drawn to it, and what attracted people to Ayn Rand. Frankly, she seems like a witch. Also, as is the failing of so many novels like this, the book did not give enough insights into, and development of, Greenspan the economist. I would have found it more interesting if the book focused entirely on that, as that is what distinguishes Alan Greenspan. Also, early in the book the author mentions that Greenspan loved golf and tennis, but did not explain how he came to love those sports. I wish the author helped us to have a better understanding of that. I think if Mr. Martin had narrowed the scope of the book, and brought a little more life to the smaller area he covered, the book would have been better.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted May 21, 2001
Before commenting on this book, let me observe that I think that Dr. Greenspan has been the best chairman of the Federal Reserve in history. Most people will agree that it is his tenure in that post while the longest economic expansion in U.S. history continues that draws our interest about him. Of the three recent books about Dr. Greenspan, I found this one by far the most useful. It is a vastly more complete, better researched and developed book than Maestro by Mr. Woodward. Although I felt I knew a lot about Dr. Greenspan after reading two other books about him recently, this one added more useful knowledge for me than the other two combined. The main reason for this was Mr. Martin's access to many people who have known Dr. Greenspan since he was a young man. As a result, you get a rounded sense of the man that is impossible to obtain from contemporary observers who met him recently. Also, almost all of the sources are cited (unlike in Mr. Woodward's book), so you can usually appreciate the context from which the observations come. Music fans and those who are interested in Ayn Rand and her philosphy will be fascinated by the many excellent details of Dr. Greenspan's interests and activities in both areas. If I liked this book so much, why didn't I rate it five stars? Basically, it is because this is a noneconomic biography of a man who was a economist, economic consultant, and central banker through most of his career. To downplay the economic thinking side of his work certainly makes the book more accessible. It also makes it more superficial. I would say this book was written to be interesting to someone who has never taken an economics course. On the other hand, Mr. Martin was refreshingly candid in his descriptions of Dr. Greenspan. For example, he cites Senator Proxmire's skeptical questioning of Dr. Greenspan during confirmation hearings in which the senator pointed out that Dr. Greenspan's firm had the worst track record of major firms for economic forecasting. He also quotes Dr. Greenspan's first wife, artist Joan Mitchell (no relation to me), about her being quizzed by the FBI about Dr. Greenspan's sexual orientation. Other judgments by the author describe economic misses and errors, such as underestimating the oncoming 1990-91 recession. I found these judgments to be objective, accurate, and fair. The book also avoids the false sensationalism of Maestro about the 1987 market crash and the Asian Contagion in 1997, and the Russian default and Long Term Capital Management's collapse in 1998. I enjoyed the final chapter where he looks at the fascination with Dr. Greenspan in the media. This included my favorite story about the CNBC briefcase indicator (interest rates tend to change when his briefcase is full before a Fed meeting). Mr. Martin pointed out that Dr. Greenspan could be transported to the Fed for these meetings in ways that would not allow us to see the thickness of his briefcase. This suggests that this briefcase is a deliberate signaling device. Very interesting. I would have liked the book to contain more quotes from Dr. Greenspan. His ability to handle politically sensitive situations is legendary. Most readers could learn aWas this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted December 16, 2000
I found this book to be a very interesting read. In fact, in some respects I found it enlightening. I took particular interest in the fact that only 1st cousins were interviewed for the book. If one spoke to any of the 2nd cousins Mr. Martin would have gottten a very different perspecctive on Alan's family. A 2nd cousin would have been able to say that the majority of the first cousin's input was just to ingratiate them-+selves with the Chairman. What is not known is that the philosophy of life that the family lives by has done nothing but lead to pain, jealousy, death and bitterness.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.