Bernanke Vs Greenspan

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A Compare and Contrast of Ben Bernanke and Alan Greenspan Ben Bernanke and Alan Greenspan had very similar views on how to run the Federal Reserve (Fed.) and the United States economy. Alan Greenspan was chairman of the Fed. from 1987 to 2006, serving five terms. After Greenspan retired his position of chairman he was succeeded by Ben Bernanke, who served a four year term from 2006 to 2014. At the time of Bernanke’s nomination, he said his “first priority would be to maintain continuity with the policies and policy strategies during the Greenspan years.” Bernanke wanted to keep the Fed. on “Greenspan standards” (Robb, 2013). Bernanke made it clear that whatever Greenspan had done during his five terms as chairman often referred to as “The…show more content…
Greenspan’s way of talking and presenting information is hard to understand from a layman 's perspective, he talks with precision and is often unclear. Although he was hard to understand, people could see the improvement in the economy and the stability his strategy supplied. While his legacy and free market strategies were based off deregulation of financial organizations and banks to promote economic growth, cutting back on governmental regulations between companies and people. He believed that the government doesn’t control prices, supply, or demand. He focused more on inflation, keeping prices down and the value of money up instead of lowering the unemployment rate (Treanor, 2013). His strategy to keep inflation low by keeping interest low led to the 2008 mortgage crisis only two months after his retirement. Greenspan 's strategy caused the Fed. to be caught off guard by the scale of the housing bust. Ultimately leading to the worst financial crises in the U.S. since The Great Depression…show more content…
Ben Bernanke’s and Alan Greenspan’s theories and ways to run the Federal Reserve were very similar at the start of Bernanke’s term, but when problems arose in the economy Bernanke had to be innovative and act quickly to prevent the recession from becoming a depression. Greenspan’s original theory of a deregulated and hands off approach to the economy worked well in stabilizing the economy and reducing inflation. His approach in reducing interest rates to keep inflation low worked well but his effort to keep the same rates throughout his 18 year term had caused a ripple effect in the economy after it became stable and stronger. His deregulation of certain financial derivatives had left shareholders vulnerable to lending institutions, and banks on Wall Street with billions of dollars in
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