Today's Date:

Dr. Greenspan with Ambassador Bujon de l'Estang at the Résidence of France (photo: J-L Atlan)

Mr. Vice-President elect,
Secretary Summers,
Senators,
Ladies and gentlemen,

It is a distinct pleasure and a great honor for Anne and me to welcome you tonight at the Residence of France. As the Nation’s capital is getting readied to welcome its 43rd President, I’m particularly glad and it is, I believe, particularly fitting that we are gathered tonight, in this friendly, almost intimate setting, to pay tribute to a man who is respected and admired in every quarter of the political spectrum, the Chairman of the Federal Reserve Board.

Mr. Chairman, everybody expects, of course, a first-class journalist and writer to come out with a great choice of words, but i sincerely think that Bob Woodward outdid himself when he selected the word "maestro" to characterize you and give its title to the book he just wrote on you and your outstanding contribution to America's economic boom.

Borrowing from the musical vocabulary couldn’t indeed be more appropriate. Like great musicians, you combine outstanding technical abilities and analytical skills with charisma and gusto. Like most Great soloists you are also a team player. Most of all, you share with great musicians one additional attribute : an infallible ear, and an ability to listen.

Indeed, you give the tone in the United States central bank--but in doing so you never forget that you are part of the band and that what counts is the ensemble sound. Maybe it's the musician in you-saxophone players may make great soloists, but they also play a key role in ensembles.

One should of course expect from a central banker that he demonstrate "centrality". But I‘m tempted to say, paraphrasing George Orwell, that some people are more central than others. Your way of acting on the economy comes of course from the thorough observation of multiple indicators on the Fed's computer screen, but it seems to me that it results mostly of a constant exchange with the operators, from the President of the United States, the Secretary of the Treasury, the Budget Director or members of Congress, to the CEOS of America's corporate world, the bankers, the economists and the traders of Wall Street. Everyone of your friends assembled here knows how you spend countless breakfasts, dinners, meetings and tennis games listening to the actors of the economic, political and financial life.

Once defined as "a high-profile, low key New York economist", since August of 1987 you have been working with three Presidents--and will very soon be working with a fourth one. In close contact and constant coordination with them, you have weathered a number of crises: the stock market crash of 1987, the looming inflation and economic slowdown crisis at the end of the eighties, the Mexican and Asian liquidities crises, in 1995 and 1997 respectively. Beyond these dramatic events, over the last decade you have accompanied the American people through an extraordinary economic situation marked by an unprecedented expansion of the economy, and demonstrated along the way an exceptional wisdom and an artful touch.

In all these circumstances you have been "minding the store", to use one of your own expressions, in the most effective kind of way. You could have stayed at your desk and remained silent or be content with uttering but a few sentences. But you never isolated yourself. Thanks, certainly, to your openmindedness but also to the influence of your lovely wife, Andrea Mitchell, you have been very much a part of the Washington scene, taking advantage of the concentration of opinions and variety of experiences to make up your own mind.

A strict libertarian, you believe in the efficacy of the free market, but you need to touch and listen to know when to act. A distinguished economist who restored the Social Security system in 1983 as head of the Bipartisan National Commission on Social Security Reform, you have never been a dogmatist as you have always been aware of the extreme complexity of the economy and the profoundly evolutive nature of its mechanisms. Not being a dogmatist doesn’t mean you are not an orthodox economist : after studying at george Washington High School (three years behind the young Henry Kissinger), you got a master’s degree in economics at NYU before completing, in 1950, a PhD in economics at Columbia University. This classical training is certainly not lost as I understand that, in our times of globalization and electronic and virtual economy, you still trust the real values which prompt some to ascertain that "you still believe in gold"…

Because you knew how to observe and take advantage of your central position, you often surprised the other operators. Among many other things, what we learnt from you is to value the importance of anticipation in monetary policy. Anticipation is not only vision. It is not forecasting either. Perhaps, borrowing to tennis, it is this extraordinary capability of being in the right spot at the right time. It is this particular quality that makes great decision makers out of central bankers and tennis players. Under your leadership, the Federal Open Market Committee has had many opportunities to anticipate, in the proper sense of the term, and the experience shows that it succeeded. This is, for example, how you decided in the early nineties to ignore the risks of inflation and accompany the strong growth of the economy, thus making possible an unprecedented period of expansion.

Mr. Chairman, since 1987 at the helm of the American central bank, you have managed to preserve its independence without ceasing to interact with the successive administrations or losing the confidence of America’s finance and business community and consumers.

From that point of view, I find the American experience fascinating, especially when we, Europeans, have to be mindful of what is being said around the cradle of the euro. it is no small measure of your authority that President Clinton always refused to comment on the Fed’s decisions or that President-elect Bush was quoted, a few days ago, as saying « I don’t think the president ought to be commenting on every Fed action ». I hope this gives an inspiration to the 12 European leaders that surround the European Central Bank in our new and sometimes cacophonic « Euroland »--an infancy illness, no doubt.

Dr. Greenspan, you are a key player not only in the evolution of the American economy but also in that of the world’s economy, which explains why France is today bestowing its highest distinction on you.

Creating an environment conducive to sustainable economic growth is, as you once said, « a never-ending process that requires never-ending vigilance". Mr. Chairman, this never-ending vigilance has been a trademark of your action and, in the same way that you have been consulting with the Washington players, you have been working closely with the world leaders. The American expansion has been beneficial to the European economy, and vice-versa. The intensity of the exchanges between Europe and the United States has created the right conditions for the historic creation of the euro. Through these extraordinary years the constant consultations between yourself and the highest French authorities have allowed us to listen to you and you to listen to us. As we all know, confidence is a crucial ingredient in monetary policy. And it is not an exageration to assert that you represent a huge capital of confidence, not only across the Atlantic Ocean, but, I would not hesitate to say, at the global level. After the recent tough decisions taken by the Fed, a Hong Kong policy maker was quoted in last Sunday’s Washington Post, as saying: "We take it that Greenspan must be worried, and he must know more than we know". Isn’t it one of the best expression of confidence into the judgement of a central banker?

Last January, you have been tapped for a new four-year term by President Clinton. Your fourth term began last June and is expected to end in 2004, introducing a sense of stability in a changing world. Tonight we are adding to the many testimonies of appreciation expressed during the last thirteen years the official and formal recognition from the French authorities . It is therefore a privilege for me to confer on you, in the name of the President of the Republic, the "Cravate "of Commander of the National Order of the Legion of honor, France’s highest national order, created by Napoleon two hundred years ago to recognize outstanding public servants.

Alan Greenspan, au nom du Président de la République et en vertu des pouvoirs qui nous sont conférés, nous vous faisons Commandeur de la Légion d’honneur.