Larry Kudlow: Alan Greenspan Was A Defender Of Freedom And Free Markets And A Friend

Alan Greenspan, America’s most powerful central banker and an apostle of freedom and free enterprise, passed away at age 100 on Monday, may he rest in peace. He served as Federal Reserve chairman for nearly 20 years from 1987 to 2006.

He was a great man and a friend and mentor to me and many other conservative economists. And during his tenure as Federal Reserve chairman, he successfully piloted our economy through 3.2% annualized real GDP growth and an average inflation rate of 2.5%, even as he successfully navigated us through a number of crises.

Meanwhile, job creation boomed during his tenure, stock markets soared, and real incomes rose. Greenspan was at heart an old-fashioned conservative business economist with a strong belief in limited government, lower taxes, and minimal regulation.

At bottom, Greenspan’s intellectual compass was rooted in free-market laissez-faire libertarianism. As a young man, he was part of Ayn Rand’s Salon, as were other Reagan advisors, Martin and Annelise Anderson.

When he accepted Richard Nixon’s offer to be Chairman of the Council of Economic Advisors (Nixon was forced to resign almost immediately after), Greenspan insisted that wage and price controls be abolished. They were, although they crept back in during the Jimmy Carter years.

As a Reagan campaign adviser, Greenspan agreed with supply-side tax cuts. Perhaps he’s best known as a forceful critic of fiat paper money and an advocate for a hard dollar backed by gold. For him, gold was the preferred guarantor of monetary and fiscal discipline.

And in his many Congressional appearances as Fed Chairman, he frequently referred to gold as a measure of dollar value and an indicator of future inflation.

During his chairmanship, the philosopher Greenspan turned into the government realist Greenspan. He put out a number of fires and saved markets during the 1987 stock market crash. He later eased money during currency crises and the dotcom bubble.

Now, some people blame him for the mortgage meltdown that occurred after he retired, but that’s too simplistic, and in many respects, completely untrue.

His attempts to rationalize the financial meltdown got him into hot water after he retired from the Fed. But I still believe the biggest culprits were Fannie Mae and Freddie Mac, and the idea of subprime lending that permeated mortgage markets and somehow allowed home loans to be issued without sufficient income, job, or credit histories from borrowers.

Greenspan opposed all of that while in office.

He believed in a sound dollar, even one linked to a gold-and-commodity price rule, along with limited government and reduced federal spending. And Greenspan served successfully under Democrat and Republican presidents, but Democrats at that time were Bill Clinton Democrats, not today’s socialist Democrats.

Today’s Democrats, like Senator Bernie Sanders, or Washington, D.C.’s mayoral nominee Janeese Lewis George, or socialist New York City Mayor Zohran Mamdani’s preferred Congressional candidates, are about as far from Alan Greenspan’s prosperous freedom and free enterprise creed as you can get.

They support open borders, abolishing ICE, a universal basic income, free government care for everything, childcare, schools, colleges, healthcare, and abortion, federal rent controls, federal freezes on electricity, national wealth taxes, packing the Supreme Court, no voter photo ID, and on and on.

All his life, Alan Greenspan fought big government socialism and totalitarianism of any kind.

His philosophy made America an enormous success. But if given a chance to govern, today’s crop of Democratic socialists will once again show why totalitarianism is always a failure.

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Larry Kudlow served as Assistant to the President for Economic Policy and Director of the National Economic Council under President Trump. Previously, he served as chief economist and senior managing director of Bear Stearns and was an associate director for economics and planning at the Office of Management and Budget during the Reagan administration. He currently serves as the host of Kudlow on FOX Business Network.