When Alan Greenspan and I studied economics together
I first took notice of Alan Greenspan, the longtime chairman of the Federal Reserve System, in the fall of 1946. We were both undergraduate students at New York University's School of Commerce, Accounts & Finance. (The school is now known simply as the Stern School of Business, thanks to the beneficence of Leonard N. Stern, a billionaire alumnus who made his fortune in the Hertz pet supply and real estate businesses.)
Greenspan and I were both enrolled in the same economics class taught by Dr. Jules Backman, who was then a nationally renowned economist. When Backman was not in the classroom, he was a consultant to major corporations and trade associations and was often testifying on their behalf before Congressional committees in Washington. Among his clients were the Association of American Railroads and the Iron & Steel Institute.
The major economic issue of the day was whether to retain or remove price controls. The controls had been clamped on all businesses during World War II, largely to prevent war profiteering. Although the war had ended two years earlier, the Truman Administration had retained them as a means of smoothing the nation's transition to a peacetime economy. Backman argued that price controls were hampering postwar economic growth and should be removed immediately.
Backman was a very talented lecturer. I remember him as the only college economics professor who could animate what was to me a dreary academic discipline. He enjoyed provoking student debate in his classroom, and a favorite issue was price controls. Most of the students in the class were World War II veterans. We favored the retention of price controls. Having been absent from the work force, we worried that we would be unable to afford what would inevitably be spiraling prices for most goods and services.
Virtually all the other students in the class had been too young to be drafted for military service and had enrolled in college after high school graduation. Greenspan was one of the non-veterans in Backman's class. But before entering NYU as an economics major, he had spent more than a year studying at the Juilliard School of Music and touring with one of the popular big dance bands as a clarinet and saxophone player.
In the classroom debate over price controls, Greenspan was the only student who spoke up to support the professor's argument that controls be dropped. I can still recall that he made his argument with exceptional passion. To me the economics course was simply an academic requirement. But it was already obvious that economics had replaced music as Greenspan's primary passion. Within a few years after we both had graduated in the class of June 1948, he had established himself as a prominent economic consultant on Wall Street. He later became chairman of the President's Council of Economic Advisers during Richard Nixon's second term and in 1987 was named head of the Federal Reserve.
I never developed a passion for economics, and perhaps that's why I never saw Alan Greenspan again.