Former Fed Chair Alan Greenspan talks trade war, federal deficit, and the Swedish economy

In a packed auditorium in Perry World House, students and faculty gathered to hear former Federal Reserve Chair Alan Greenspan speak about pressing economic issues the country is facing. During the hour-long talk, Greenspan addressed a range of topics, including the ongoing trade war with China and America’s mounting federal deficits.

The event, “Appraising the Future,” was organized by the Penn Wharton Budget Model and was moderated by its faculty director, Business Economics and Public Policy professor Kent Smetters. From 1987 to 2006, Greenspan served five consecutive terms as chair of the Federal Reserve and received appointments from four different United States presidents.

The dialogue began with a discussion on the rise of China’s economy, which Greenspan was quick to put into context.

“China, as far as market value of what it produces, is marginally higher than the United States, but on the per capita basis, they’re something like one third of where we are,” Greenspan said. “We had China’s per capita GDP back in the 1960s.”

On the United States-China trade war, Greenspan expressed a bleaker view, noting that trade restrictions will lead American taxpayers to pay for tariffs on Chinese imports. In a best-case scenario for the United States, he noted, it would only be that “we lost less than they did.”

Greenspan also praised the Swedish model of generous social welfare, an unusual position for a man who identifies as a “lifelong libertarian Republican.”

“If we followed their economy, we’d do fine,” he said, dismissing the common objection that Sweden only has the population of New York City. “It has nothing to do with whether you’re a large economy or a small economy, it has to do with the form of your pension programs.”

Still, Greenspan was quick to affirm the merits of capitalism when responding to an attendee’s question about the recent rise of socialism in the United States.

“Factually, there’s no doubt capitalism raises the standards of living,” he said.

Greenspan’s arrival on campus comes after the recent publication of his book, “Capitalism in America: A History.” The book, published in October 2018 and co-authored with journalist Adrian Wooldridge, details the economic history of the United States from colonial times until today. Early arrivals to the event received free copies. 

Throughout the talk, Greenspan also displayed his more human side. Noting that Greenspan’s wife, NBC anchor and 1967 College and Wharton graduate Andrea Mitchell, was in attendance, Smetters asked “what’s the secret to your long lasting marriage?”

“It’s her smile,” Greenspan said.

Attendees said they admired Greenspan’s career and appreciated hearing from an academically oriented speaker.

“It was really cool to get an actual Fed Chair in,” Wharton junior Simone Liao said. “We usually don’t get many academic speakers.”

Other students praised Greenspan for his wide range of achievements.

“Mr. Greenspan is an icon of the U.S. and capitalism,” second-year Wharton MBA student Henrique Hypolito said.