Federal reserve chairman Alan Greenspan was in a self-congratulatory mood when he spoke to the annual meeting of the American Economic Assn. on Jan. 3. In a lengthy defense of his 16-year tenure atop the central bank, the grand master of money argued that the gathering recovery―and the mildness of the recession that preceded it―vindicated his much-maligned hands-off approach to the roaring '90s stock market Instead of trying to rein in prices by tightening monetary policy, he allowed a bubble to build, but then cut interest rates sharply to contain the fallout once the bubble burst. "There appears to be enough evidence, at least tentatively, to conclude that our strategy of addressing the bubble's consequences rather than the bubble itself has been successful," he told the audience in San Diego.
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