(2 of 3)
In or out of Government, Greenspan has kept a high profile. In 1985 he appeared in television commercials and newspaper and magazine ads as a pitchman for Apple's IIc computer. He makes about 20 speeches a year (his & standard fee: $22,000) and sits on the boards of six corporations, including Alcoa, Mobil and Capital Cities/ABC.
Greenspan often flashes an understated sense of humor and irony. At a TIME Board of Economists meeting in 1984, for example, he talked about the need for political leaders to hammer out a federal budget compromise behind closed doors. Said he: "The old smoke-filled room probably will have to be resurrected, even if it has a NO SMOKING sign in it."
Born in Manhattan as the only child of Stockbroker Herbert Greenspan and his wife Rose, young Alan had displayed a natural affinity for numbers by the time he was five. He could add large sums in his head and rattle off baseball players' batting averages. A mediocre student at George Washington High School, Greenspan went on to receive his bachelor's degree in economics summa cum laude from New York University in 1948. He entered the doctoral program at Columbia University, where he came under the tutelage of the soon-to-be- legendary Arthur Burns. Greenspan left to go into business for himself in 1953 and never got around to completing his degree (finally granted by New York University) until 1977.
Perhaps the most important of Greenspan's early gurus was Ayn Rand, the best-selling author of novels like Atlas Shrugged. Though Rand is now generally viewed as a pop philosopher who was neither a rigorous nor original thinker, she was fresh and influential when Greenspan met her in 1952. The economist became taken with her theory of objectivism, which argues that society is best served by "rational selfishness," in which people act only to further their own private interests. Greenspan, who was a friend of Rand's until her death in 1982, credits the writer with teaching him that "capitalism is not only practical and efficient but also moral." During the 1960s, as a contributor to the Objectivist, Rand's monthly journal, Greenspan expounded some extreme economic views. "The welfare state," Greenspan wrote, "is nothing more than a mechanism by which governments confiscate the wealth of the productive members of society."
His writing was only a sideline, though. After launching his consulting firm with partner William Townsend, Greenspan devoted his energies to building the business. This was especially evident after Townsend died in 1958 and Greenspan acquired 99% of the stock. Today Townsend-Greenspan provides a wide variety of financial data and detailed forecasts about how the economy will perform. The cost to clients: between $15,000 and $200,000 a year.
As an economic forecaster, Greenspan has had his share of hits and misses. In early 1986 he predicted a year-end unemployment rate of 6.6% and was right on the button. In December 1984, though, Greenspan estimated that in 1986 inflation would be running at a 6.8% rate. In fact, prices increased 1.1% last year.
A call from Nixon's 1968 presidential campaign propelled the economist into the political arena. As the candidate's director of domestic-policy research, Greenspan showed he could adapt and, when necessary, subordinate his own economic opinions to the realities of politics. He proved, in short, to be a pragmatist.