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Special Event

President Clinton Renominates Alan Greenspan for Fourth Term as Fed Chairman

Aired January 4, 2000 - 11:38 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

TERRY KEENAN, CNN ANCHOR: We want to go to the Oval Office right now. We have been waiting for the president to make that announcement, the renomination of Alan Greenspan, a fourth term for the Federal Reserve. Let's listen.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: You're supposed to stand over here today. This is the only time I'm interfering with the independence of the Fed.

(LAUGHTER) You have to come over here.

Good morning. Ladies and gentlemen, the United States is enjoying an extraordinary amount of economic success, for which we are all grateful. It seems clear that it is the result of the convergence of a number of forces: A great entrepreneurial spirit; stunning technological innovations; well-managed businesses; hard-working and productive men and women in our workforce; expanding markets for our goods and services; a complete commitment to fiscal discipline; and, of course, a Federal Reserve that has made independent, professional and provably wise judgments about our monetary policy.

Since I took office seven years ago, one of the hallmarks of our economic strategy has been a respect for the independence and the integrity of the Federal Reserve. I have always believed the best way for the executive branch to work with the Fed is to let the chairman and the members do their jobs independently while we do our job: To promote fiscal disciple, to open markets, to invest in people and technologies. That has given us strong economic growth with low inflation and low unemployment.

Thanks to the hard work of the American people, we now enjoy the longest peacetime expansion in our history. In February it will become the longest economic expansion ever. With productivity high, inflation low and real wages rising, it is more than the stock markets which have boomed. This has helped ordinary people all over America.

We have a 30-year low in unemployment, a 32-year low in welfare, a 20-year low in poverty rates, the lowest African-American and Hispanic unemployment rates ever recorded, the lowest female unemployment rate in 40 years, the lowest single-parent household poverty in 46 years. Clearly, wise leadership from the Fed has played a very large role in our strong economy. That is why today I am pleased to announce my decision to renominate Alan Greenspan as chairman of the Federal Reserve Board.

For the past 12 years, Chairman Greenspan has guided the Federal Reserve with a rare combination of technical expertise, sophisticated analysis and old-fashioned common sense. His wise and steady leadership has inspired confidence, not only here in America but all around the world.

I believe the productive but appropriate relationship that our administration has enjoyed with the Fed has helped America play a critical and leading role in dealing with the Asian financial crisis and many of the other things that we have faced over the last seven years.

Chairman Greenspan's leadership has always been crucial to these successes. With his help, we were able also last year to enact historic financial reform legislation, repealing Glass-Steagall and modernizing our financial systems for the 21st century.

He was also -- I think it's worth noting -- one of the very first in his profession to recognize the power and impact of new technologies on the new economy, how they change all the rules and all the possibilities.

In fact, his devotion to new technologies has been so significant. I've been thinking of taking alan.com public, then we could pay the debt off even before 2015.

On a more serious note, let me say again that this chairman's leadership has been good not just for the American economy and the mavens of finance on Wall Street, it has been good for ordinary Americans.

Even though my staff makes sure that I never give Chairman Greenspan advise, they have not been able to stop me from asking him for his advice. So, I would also like to thank him for the many conversations we've had over the last seven years in our ongoing attempt to understand this amazing and ever-changing economy.

Finally, I would like to thank him for his willingness to serve another term. After these years of distinguished public service and at a pinnacle of success, he could be forgiven if he were willing to walk away to a more leisurely and doubtless more financially lucrative life. His continued devotion to public service should be a cause of celebration in this country and around the world. And it's something for which I am very grateful.

Mr. Chairman.

ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE: Mr. President, I first wish to express my deep appreciation to you for the confidence that you've shown in the early years. And I look forward to Senate consideration. The Federal Reserve has been a remarkable institution with which to work. And as I indicated to you inside, I must say I have enjoyed every minute of it. It's really been an extraordinary challenge and especially for an economist who likes to get into the nitty-gritty of every statistic you've ever seen.

My colleagues and I have been very appreciative of your support of the Fed over the years and your commitment to fiscal discipline, which, as you know and indeed have indicated, has been instrumental in achieving what, in a few weeks, as you pointed out, will be the longest economic expansion in the nation's history.

Your economic policy staff has been exceptional in my view. I've especially enjoyed working with Lloyd Benson, Bob Rubin, and now Larry Summers. These are all superb human beings, as well as first-rate professionals. The same goes for the rest of your economic advisers, Mr. President, Gene Sperling and Martin Baily and his colleagues.

Again, Mr. President, thank you, and I look forward to working with you in the future. And I must say you have been a good friend to America's central bank. Thank you, sir.

QUESTION: Is the market irrational?

GREENSPAN: Helen, I...

(CROSSTALK)

QUESTION: ... previous statements on the stock market?

GREENSPAN: You surely don't want me to answer that.

QUESTION: Yes, I do.

GREENSPAN: You do? Well, I don't think I will.

(LAUGHTER)

GREENSPAN: Helen, you've been asking me questions now for decades...

QUESTION: (OFF-MIKE)

GREENSPAN: ... and I usually answer them, so my record's not bad.

QUESTION: Mr. President, did it take some persuading to get Mr. Greenspan to agree to serve another term, if he's confirmed?

CLINTON: No, I asked him and he said yes. I wish I -- you know, when I -- when we finish here, I have to go back to Shepherdstown. I wish I could have so much success in the Middle East peace talks -- I'd just ask them and they'd say yes the way Mr. Greenspan did. It would be quite a joy.

(CROSSTALK) QUESTION: What factors played in your decision to stay? After a decade there, one might expect that you might want to retire and move on.

GREENSPAN: There's a certain, really quite unimaginable, intellectual interest that one gets from working in the context where you have to put broad, theoretical and fairly complex conceptual issues to a test in the marketplace. Unlike a straight academic career, you end up fully recognizing that hypotheses matter, that actions matter, and the ideas that you come up with matter. That, as I indicated, is really quite an unusual thing for an economist to deal with.

And as I think Larry Summers probably knows as well if not better than I, it's a type of activity which forces economists like ourselves to be acutely aware of the fact that our actions have consequences, and it's crucially important for us to try to determine in advance what those consequences are.

And that is a challenge which I must say to you is, as I said to the president before, it's like eating peanuts. You keep doing it, keep doing it, and you never get tired, because the future is always ultimately unknowable.

QUESTION: Mr. President, how are the talks going in the Middle East -- on the Middle East?

CLINTON: Well, we just started, but all the issues are on the table, and it's a pretty full table, as you might imagine.

QUESTION: (OFF-MIKE)

CLINTON: We're working at it. I'm going back up today, and I'm hopeful.

QUESTION: Are you disappointed at all with the pace of yesterday's talks and that the trilat did not take place?

CLINTON: No. No, that was partly my decision. We just had a lot of other work to do, and I'm going back today and we'll -- we're -- I think they're both very serious. I think they both want an agreement. I think there are difficult issues, and we'll just have to hope that we work it out.

STAFF: Thank you, everyone. Thank you.

(CROSSTALK)

QUESTION: ... the Israelis need $17 billion, sir?

CLINTON: What?

QUESTION: The reports that the Israelis need $17 billion...

CLINTON: I -- excuse me. Lost my cup. I think there will be some costs associated with the -- with the security rearrangements, and then obviously over the long run, as I have made clear, we need to make contribution, as do our friends in Europe and hopefully some in Asia, to the long-term economic development of a regional Middle East economy.

So there will be some costs involved there over a period of years, not just in one year.

We're trying to determine exactly what that should be and of course before I can make any commitments I will have to consult with the congressional leadership in both houses and in both parties, and some of the committee leaders as well, and I have made that clear.

So, we're attempting to ascertain what the general outlines of our -- of the costs would be, over how many years those costs can be spread. And then, I will have to do some serious consultation with the congressional leadership before I can do more than say I would support this. We want to have a high probability of success. And I believe that in America, Americans of all political parties and all stripes desperately want us to see a comprehensive peace in the Middle East and understand that in the next three to four months we have on unparalleled opportunity that we have to seize. So, I'm quite hopeful about that.

QUESTION: (OFF-MIKE) move to New York?

CLINTON: I have been helping. We've been working at it. We've been boxing things up and figuring out what to leave here, what to move there. It's been a rather interesting challenge over the holidays, but I've enjoyed it very much.

Thank you.

QUESTION: Is $17 million -- $17 billion the right figure?

CLINTON: I don't know yet. I've -- we have -- once we get the -- what we're working on now up in West Virginia is sort of figuring out what the process for the next few days is going to be. And then, we have to start working on that and figuring out what the specific jobs are that we would be asked to help finance -- whether we could get any others to help, and over how many years it would have to be done. Then, I'll have to go talk to the Congress. And I'm just not in a position yet to say what the -- what dollar amount I would ask our Congress for.

BILL TUCKER, CNN ANCHOR: You've been listening. As expected, President Clinton renominating Alan Greenspan for his fourth term as chairman of the Federal Reserve. In addition, getting a little bit of a bonus, there, the president also fielding questions on the state of the Middle East peace talk which are under way in Shepherdstown, Virginia.

KEENAN: Exactly, and the president calling Mr. Greenspan's acceptance of that renomination a cause for celebration, and, of course, Mr. Greenspan will have to be confirmed by the Senate, but he enjoys strong bipartisan support.

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