Alan Greenspan

Every year Time Magazine comes out with a special edition titled “The Worlds Most influential People” Everyone from Presidents, Kings, Celebrities, and Authors make this annual list. The names are some that everyone recognizes: --------------------------- however, a name that frequently appears is one many people may not recognize, Jannet Yellen. Jannet Yellen is Chairwoman of the Federal Reserve, and arguably the most influential person in the world. The Federal Reserve is the bank of the United States. The Federal Reserve’s decisions, approved by Jannet Yellen, impact the entire US Economy, the largest and most important economy in the world, almost instantly.

There are many thoughts about the Federal Reserve, some people think it is the biggest thief ever and some other people think that the Illuminati is running the show. Also some people know that the Federal Reserve has saved the economy of the United States a couple of times from depressions. Moreover, economists think that the Federal Reserve saved the U.S. from the most recent depression in 2008. Many people in the U.S. may not know who Alexander Hamilton is; however, any economist or anybody who is studying economy should know who he was. Alexander Hamilton played a big role in the economy of the United States in 1791, when he started promoting a movement to embrace a central bank. In that same year the first bank of the United States

The federal reserve has raised interest rates five times in less then twelve months, and the pervious raises are just barely beginning to take effect. The previous raises averaged around a quarter percentage point, and since these raises failed to slow the economy, Greenspan, unable to take anymore chances doubled the previous with a promise of more to come.

The last time the Fed raised interest rates (to 5.25%) was in 2006. This move was soon reversed as the 8 trillion dollar housing market bust sparked the global financial crises. About 8.7 million jobs (about 6%) were lost, unemployment rose to about 10% nationally leaving many households with less to spend and higher debt.

The first editorial, “The Federal Reserve Politicians,” discussing the expanding power the federal reserve has. The federal reserve officials have become the most important economic decision makers in the government. The author believes that under a healthy government the Fed or any party should not have so much power without more accountability.

Being born in August 13th of 1946, she is the sixty nine year old that is the current chairwoman of the Federal Reserve Board of Governors. Since the Federal Reserve is the central bank of the United States its responsibilities do include regulating other banks and financial institutions as well as dictating the monetary policy. In order to get into the Federal Reserve Board of Governors, one has to have a background in Economics. From her undergraduate education, she showed an interest for Economics, in 1967 she received her Bachelor of Arts from Brown University where Yellen received distinction of summa cum laude. Few years later, continuing the path towards pursuing Economics at the graduate level, she gained her Ph. D. in Economics in1971 from Yale University. Afterwards, Yellen served as assistant professor for Harvard University for its School of Business from 1971 to 1976 as well for the University of California, Berkeley from 1980 to 2004. Teaching at the Berkeley Hass School of Business involved teaching Macroeconomics, Introduction to International Business International for undergraduate and graduate. In collaboration with her husband George Akerlof, she published “How Large Are the Losses from Rule of Thumb Behavior in Model of the Business Cycle” in 1991.

The Fed, established in 1913, has several main functions that include: establishing monetary policy, regulating smaller banking institutions, and finding ways to create financial stability. There are several reasons that these responsibilities need to remain out of the hands of politicians. The economic rule that economics and politics do not mix well because of their differing focuses, the differing goals of the two bodies, and the inconsistency of politicians in Congress

As you may or may not know “The Federal Reserve System is made up of a Board of Governors and twelve regional Federal Reserve Banks located in major cities throughout the country. While the board has seven members the two serve as chairman and vice chairman and each governor is appointed to fourteen-year term while appointments to the roles of chairman and vice chairman are for four years. The Federal Reserve governors serve second to lifetime appointments of federal judges” (Board, 2003). The Federal Open Market Committee (FOMC) sets target that meets eight times per year to make decisions on monetary

The San Francisco branch of the Federal Reserve has a diversion on its site that gives you a chance to play at being Chair of the Federal Reserve. In the wake of tinkering with it, I 've arrived at a few conclusions: Modeling the economy is a mug 's diversion, fleeting loan costs are a poor instrument for guiding the economy, and I ought to never be given the employment of running a national bank.

The United States Federal Reserve has been conducting open market operations in the financial markets since 2008 in order to drive down interest rates and promote economic growth following the 2007-08 financial crisis. The subsequent recession, dubbed the Great Recession, destroyed $19 trillion in household wealth and nearly 9 million jobs. The highly controversial quantitative easing (QE) program, which refers to the process of introducing new money into the money supply, has been effective in promoting US recovery over the past six years.

In an instant a single organization, with minimal government oversight, can influence entire markets and monetary supply of the country with the largest economy in the world. The United States founding fathers established a government system to distribute certain powers of the federal government to particular branches that have checks and balances in place to assure efficiency and openness among its divisions. One may assume that the organization that controls the monetary supply of an economic powerhouse of a country would have strong oversight and control over the policies they carry out. The Federal Reserve, also referred to as The Fed, has a purpose to protect and control the fiscal system of the United States to create a safer lending and borrowing market for private citizens, businesses, and the federal government. Americans perceive the Fed as an extremely powerful organization. Some have asserted, including Hillary Clinton’s spokesman, Jesse Ferguson, that “The Federal Reserve is a vital institution for our economy and the well-being of our middle class” (qtd. in Shapiro 7). Unfortunately, Federal Reserve financial policies have become detrimental to the growth of the national economy and the dollar, therefore, congressional actions against the Federal Reserve Bank are a necessity to avoid continuation of instability in both US and world markets.

During this period, many Internet-based companies, commonly referred to as dot-coms, were founded, many of which failed. Academics Preston Teeter and Jorgen Sandberg criticized Greenspan for his role in the promotion and rise in tech stocks. Their research cites numerous examples of Greenspan putting a positive spin on historic stock valuations despite a wealth of evidence suggesting that stocks were overvalued. Sequentially, he was criticized for contributing to the subprime mortgage crisis. When his fifth term expired in 2006, Greenspan retired from his position at the Federal Reserve Board. His successor in this role was Ben Bernanke. In 2011, the bipartisan Financial Crisis Inquiry Commission found that during the U.S. housing bubble of the early 2000s, Greenspan’s failure to limit trade in securities backed by mortgage loans and his advocacy of deregulation of the financial industry had contributed to the global financial crisis of 2008. Wall Street and Greenspan often found themselves at odds. Most business papers have shaped Greenspan as being rabidly opposed to inflation. Greenspan was criticized for pursuing a battle against inflation when he could have used his power to reach full employment or economic growth

Over the past few years we have realized the impact that the Federal Government has on our economy, yet we never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to our attention, especially since we see inflation, gas prices, unemployment and interest rates on the rise. It has given us a better understanding of the effect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control over our Economy, we decided to tackle the subject of the Federal Reserve System and try to get a better understanding of the history, the structure, and the monetary policy of the power that it holds.

Later in his Presidency, Ronald Reagan would appoint Alan Greenspan to head the Federal Reserve Bank. Greenspan, an economist, had previously sent a letter to government regulators to help convince them of the “soundness” of the savings and loan industry and its need to be de-regulated. He was paid $40,000 by a top executive of the savings and loan industry, Charles Keating, for his work in convincing the regulators to de-regulate the savings and loan industry. After the collapse of the savings and loan industry, many top executives were arrested and sent to prison for looting their companies, Charles Keating was one of the main criminals that were sent to prison. (Ferguson 15:35)

Ben Bernanke began his 4 year appointment as Fed Chairman and 14 year term on the Federal Reserve Bank's Board of Governors February 1, 2006 by President George H.W. Bush. He was appointed to a second term as the Chairman on February 1, 2010 by President Barack Obama. Dr. Bernanke received his B.A. in economics from Harvard in 1975 and a Ph.D. in economics from the Massachusetts Institute of Technology in 1979 (Federal Reserve, 2011).