PAUL SOLMAN: Alan Greenspan# born in New York City in 1926,## he told Jim Lehrer in 2007 that he was# a whiz with numbers from the beginning.

ALAN GREENSPAN, Former Federal Reserve Chairman:# The math was a big deal when I was very young and## my mother used to parade me out.

She would have me# add 45 and 162 in my head.

And I was a kid.

And... JIM LEHRER, Co-Founder and Former# Anchor, "PBS NewsHour": You were## just being kind of there t.. ALAN GREENSPAN: Showoff.

JIM LEHRER: Yes.

Yes.

Yes.

ALAN G.. JIM LEHRER: You were, yes.

PAUL SOLMAN: But Greenspan's .. jazz professionally.

It wasn't long, though,# before he gave up gig work to go back to numbers.

ALAN GREENSPAN: The best economic# decision I ever made in my life## was to decide to leave the music# business and go into economics.

PAUL SOLMAN: Young economist# Greenspan was soon drawn to Ayn Rand,## fierce opponent of government regulation.

AYN RAND, Writer and Philosopher:# Each man must live as an end in## himself and follow his own rational self-interest.

PAUL SOLMAN: The author of "The Fountainhead"# and "Atlas Shrugged" became Greenspan's mentor.

SEBASTIAN MALLABY, Author, "The Man Who Knew:# The Life and Times of Alan Greenspan": He## was almost a quasi-son, I would say.

PAUL SOLMAN: Sebastian Mallaby wrote a# biography of Greenspan, "The Man Who Knew."

SEBASTIAN MALLABY: His roots were in the extreme# libertarian anti-government circles.

And it's## remarkable, therefore, that he spent most# of his career very successfully in power,## in politics, in Washington, and doing all# the things that a libertarian might appall.

PAUL SOLMAN: Greenspan got into politics as# an adviser to the 1968 Richard Nixon campaign,## chaired the Council of Economic# Advisers under President Ford,## was a member of President Ronald# Reagan's economic policy board.

GEORGE H.W.

BUSH, Former President of# the United States: I, Alan Greenspan... ALAN GREENSPAN: I, Alan Greenspan... PAUL SOLMAN: And, in 1987, he became# chairman of the .. RONALD REAGAN, Former President of the# United States: Chairman Greenspan will## bring all his skill to bear upon the task## of promoting our continued economic# growth while keeping inflation low.

PAUL SOLMAN: He went on to serve five# terms under four different presidents,## trusted by Republicans and Democrats alike.

SEBASTIAN MALLABY: He just had this ability# to go into a room in a one-on-one meeting,## spout a bunch of very obscure data,# and make the other person feel that## the only way they could understand# this stuff is they ask for his advice.

PAUL SOLMAN: Just two months# after he became Fed chair,## the stock market crashed by over 22# percent in one day, October 19, 1987.

SEBASTIAN MALLABY: And he issued a statement# saying that the Fed would do what it took## effectively to stabilize the markets, and that# was enough to get the markets to bounce back.

PAUL SOLMAN: Whenever the stock market# threatened to plunge again, says Mallaby: SEBASTIAN MALLABY: Greenspan seemed to pop up,# say something which stabilized everybody's nerves,## offer maybe to cut interest rates, and then# that would make the markets go up again.

PAUL SOLMAN: Greenspan was credited with# steering the Fed through two recessions.## For stabilizing global markets in the late 90s,## he was lionized and praised for# intervening again after September 11.

And, in fact, Greenspan's reign coincided with# the longest economic expansion in U.S.

history,## prompting the title maestro of the U.S.

economy.

SEBASTIAN MALLABY: He really# was in a way that I think it's## hard to imagine today a sort of technocrat hero.

PAUL SOLMAN: In one widely noted speech, Greenspan# worried openly about the stock market overheating.

ALAN GREENSPAN: How do we know when irrational# exuberance has unduly escalated asset values,## which then become subject to# unexpected and prolonged contractions?

PAUL SOLMAN: But, more typically, he# kept markets up, though using opaque## language to explain himself, especially when# asked a question he didn't want to answer.

SEBASTIAN MALLABY: And so he would let his# sentence sort of go around with multiple## subclauses, and it would just be incomprehensible.# It was a tactic and a very successful one.

PAUL SOLMAN: No wonder his testimony# before Congress could be hard to follow.

ALAN GREENSPAN: We, at the Federal Reserve,# recognizing the powerful forces of productivity## growth and global restraint on inflation, have# not perceived to date the need to tighten policy## in response to strong demand beyond what# has occurred through falling inflation's## upward pressure on the real federal funds rate# and the modest increase in the nominal rate.

PAUL SOLMAN: As Greenspan later told Jim Lehrer: ALAN GREENSPAN: One of the problems# that surprised me when I got into## public life was that open, clear# talk is -- often creates problems.

PAUL SOLMAN: In 2007, there were serious worries# about a financial bubble.

Greenspan's response?

ALAN GREENSPAN: When you get bubbles like this,# there is no way of diffusing them until the## speculative fever breaks on its own.

PAUL SOLMAN: Soon after came the 2008 financial# collapse, and Greenspan's reputation quickly## reversed.

He was widely criticized# for having allowed the housing bubble.

SEBASTIAN MALLABY: You know, financial bubbles# are super disruptive, and to ignore them is## a big mistake.

And Greenspan made that# mistake.

And that is where I fault him.

PAUL SOLMAN: But when he appeared# before a House committee in 2008,## Greenspan sort of admitted that he'd put# too much trust in markets to self-correct.

ALAN GREENSPAN: Those of us who have looked to the# self-interest of lending institutions to protect## shareholders' equity, myself especially,# are in a state of shocked disbelief.

PAUL SOLMAN: For much of his tenure, Greenspan# presided over a rapidly changing economy, one## transformed by technology and globalization, but# it was all part of a business he never tired of.

ALAN GREENSPAN: I have been an# economist since the latter part## of the 1940s.

And that's my profession.

I love it.

PAUL SOLMAN: Alan Greenspan is survived by his# wife of 29 years, journalist Andrea Mitchell.

For the "PBS News Hour," Paul Solman.