it would be imprudent and immoral to minimize the human cost of its disruptions.
In the face of the increasing integration of the global economy,
the world's citizens face a profound choice: to embrace the worldwide
benefits of open markets and open societies that pull people out of poverty
and up the ladder of skills to better, more meaningful lives, while bearing
in mind fundamental issues of justice; or to reject that opportunity and
embrace nativism, tribalism, populism, indeed all of the "isms" into which
communities retreat when their identities are under siege and they cannot
perceive better options. There are enormous obstacles facing us in the decades
ahead, and whether we surmount them is up to us. For Americans,
opening our borders to the world's skilled workforce and education reform
must be high on the policy agenda. So too must be finding a solution to our
looming Medicare crisis. These are subjects to which I will return at the
book's end. I conclude in the last chapter that despite the many shortcomings
of human beings, it is no accident that we persevere and advance in
the face of adversity. It is in our nature—a fact that has, over the decades,
buoyed my optimism about our future.
18
ONE
CITY KID
I
I
f you go to the West Side of Manhattan and take the subway north, past
Times Square, Central Park, and Harlem, you come to the neighborhood
where I grew up. Washington Heights is almost at the opposite
end of the island from Wall Street—and not far from the meadow where
Peter Minuit is said to have bought Manhattan from the Indians for $24
(there's a commemorative rock there today).
The neighborhood was mostly low-rise brick apartment buildings filled
with families of Jewish immigrants who had streamed in before the First
World War, as well as some of Irish and German origin. Both sides of my
family, the Greenspans and the Goldsmiths, arrived at the turn of the cen
tury, the Greenspans from Romania and the Goldsmiths from Hungary. Most
families in the neighborhood, including ours, were lower middle class—
unlike the utterly poverty-stricken Jews of the Lower East Side. Even dur
ing the worst years of the Depression, when I was in grade school, we had
enough to eat; if any of our relatives experienced hardship I never knew it.
I even got an allowance: 25 cents a week.
I was an only child, born in 1926, and my parents were soon divorced.
They split up before I can remember. My father, Herbert, moved back to
THE AGE OF TURBULENCE
Brooklyn, where he'd grown up. He lived with his parents until eventually
he remarried. I remained with my mother, Rose, who raised me. Though she
was only twenty-six and was very attractive, she took back her maiden name
and never married again. She found a job as a saleslady at the Ludwig-Baumann
furniture store in the Bronx and was able to hold it through the Depression.
She was the one who made ends meet.
She was the youngest of five brothers and sisters, so we were part of a
larger family. My cousins and uncles and aunts were always in and out of
our lives, which made up somewhat for not having a father around, or siblings.
For a time my mother and I lived with my grandparents, Nathan and
Anna. The Goldsmiths were a lively, musical bunch. My uncle Murray was
a pianist who could sight-read the most famously complex masterpieces.
Changing his name to Mario Silva, he went into show business and cowrote
a Broadway musical, Song of Love, about the composer Robert Schumann.
Eventually he headed to Hollywood, where Song of Love was made into a
movie starring Katharine Hepburn and Paul Henreid. At family gatherings
every few months, my uncle would play and my mother would sing—she
had a soulful contralto voice and liked to imitate Helen Morgan, a torch
singer and Broadway actress famous for popularizing songs like "Can't Help
Lovin' Dat Man." Otherwise my mother lived a quiet, family-centered life.
She was optimistic and even-tempered, and not intellectual in the least. Her
reading consisted of the Daily News, a tabloid; instead of bookshelves, our
living room featured a piano, a baby grand.
My cousin Wesley, who is four years older than I, was the nearest I had
to a brother. During the summer months of the early 1930s, his family
would rent a house not far from the ocean in a neighborhood called Edge-
mere, way down in the southern reaches of Queens. Wesley and I would
scour the beaches looking for coins. We were very successful at it. Even
though it was the depths of the Great Depression, people could still be relied
upon to take coins to the beach and lose them in the sand. The only
obvious legacy of our hobby is my habit of walking with my head down; if
anyone asks, I tell them, "I'm looking for money."
But not having a dad left a big hole in my life. Every month or so I'd
take the subway and go visit him in Brooklyn. He worked on Wall Street as
a broker, or in those days what they called a customer's man, for small firms
20
CITY KlD
you've never heard of. He was a slim, handsome guy who looked a little like
Gene Kelly and he presented himself well. Yet he never made very much
money. He always seemed to feel awkward talking to me, and it made me
feel awkward too. He was smart, though, and in 1935, when I was nine, he
wrote a book called Recovery Ahead!, which he dedicated to me. It predicted
that FDR's New Deal was going to bring back good times to the U.S. economy.
He made a big deal of presenting a copy to me, with this inscription:
To my son Alan:
May this my initial effort with constant thought of you branch out
into an endless chain of similar efforts so that at your maturity you
may look back and endeavor to interpret the reasoning behind these
logical forecasts and begin a like work of your own. Your dad.
During my years as Fed chairman, I would show this to people from time
to time. They all concluded that the ability to give inscrutable testimony
before Congress must have been inherited. As a nine-year-old, however, I
was totally mystified. I looked at the book, read a few pages, and put it aside.
My affinity for numbers probably did come from him. When I was very
young, my mother used to trot me out in front of relatives and ask, "Alan,
what's thirty-five plus ninety-two?" I'd announce the answer after adding
in my head. Then she'd use bigger numbers, then switch to multiplication,
and so on. Despite this early claim to fame, I was not a confident boy. While
my mother could make herself the star of the family party, I was more inclined
to sit in the corner.
At the age of nine, I became an avid baseball fan. The Polo Grounds were
just a short walk away, and kids from the neighborhood could often get in
free to watch the Giants play. My favorite team was the Yankees, however,
and getting to Yankee Stadium involved a subway trip, so mainly I read about
them in the newspapers. Although regular game radio broadcasts did not arrive
in New York until 1939, the 1936 World Series was broadcast, and I developed
my own technique of keeping box scores. I always used green paper,
and recorded each game pitch by pitch, using an elaborate code I made up.
My mind, which had been essentially empty to that point, filled with baseball
statistics. To this day I can recite the lineup of Yankees starting players,
21
THE AGE OF TURBULENCE
complete with their positions and batting averages, for that World Series. (It
was Joe DiMaggio's rookie season—he hit .323—and the Yanks beat the Giants
four games to two.) I learned fractions doing batting averages: 3 for 11
was .273, 5 for 13 was .385, 7 for 22 was .318.1 was never as good converting
fractions above 4 for 10, since few batters hit over .400.
I wanted to be a ballplayer myself. I played on neighborhood teams,
and I was pretty good—I'm a lefty, and I had the agility and reflexes to
make a solid first baseman. By the time I was fourteen, one of the bigger
guys, who was maybe eighteen, told me, "You keep going at the rate you're
going, you could be in the major leagues someday." Needless to say, I was
thrilled—but that is the very moment at which my progress stopped. I
never fielded or hit as well after that season. I'd peaked at fourteen.
Besides baseball, I got into Morse code. In the late 1930s, cowboy movies
were in vogue—we'd pay 25 cents to go to the local theater to see the
latest adventure of Hopalong Cassidy. But the characters who really intrigued
me were the telegraph operators. Not only did they have the power
of instantaneous communication at their fingertips—at crucial moments in
the plot, they could call for help or warn of an impending Indian attack, as
long as the lines hadn't been cut—but also there was artistry involved. A
skilled telegraph operator could communicate forty or fifty words per minute,
and an equally skilled person at the other end not only would get the
message but could tell just from the distinctive rhythm and sound of the
code who was transmitting. "That's Joe's fist," he would say. My buddy
Herbie Homes and I rigged up a battery and two key sets and practiced
sending messages. We never got above tortoise speed, but just knowing the
code gave me the thrill of that world. Much later in life, I was able to experience
that same sense of awe at communicating across continents via satellite
with my fellow central bankers.
Secretly I yearned for a way out of New York. At night sometimes I'd
huddle at the radio, turning the dial, trying to pick up stations far away.
From about age eleven, I built a collection of railroad timetables from all
over the country. I'd spend hours memorizing the routes and the names of
towns in the forty-eight states. Methodically I'd imagine taking a trip on, say,
the Great Northern, crossing the vast plains of Minnesota, North Dakota,
22
CITY KlD
and Montana, stopping at places like Fargo and Minot and Havre, then
heading onward across the Continental Divide.
When I was thirteen, my father unexpectedly invited me on a business
trip to Chicago. We went to Penn Station and boarded the Broadway Limited,
the Pennsylvania Railroad's flagship train, which headed down to
Philadelphia before turning west. Then it carried us through Harrisburg
and Altoona, and by the time we reached Pittsburgh it was night. In the
dark we passed by huge steelmaking furnaces spewing flame and sparks—
my first exposure to the industry that would become my specialty in later
years. In Chicago I took pictures of landmarks like the Water Tower and
Lake Shore Drive, and after we got home I developed them in my darkroom
(photography was another of my hobbies). That trip helped solidify
my dream of finding a more interesting life than being an average kid in
Washington Heights. But I never discussed this with another soul. Though
my mother knew I collected timetables, I'm certain she didn't realize what
they meant to me. It was her world that I was escaping.
My other great passion was music. I took up the clarinet at age twelve
after hearing my cousin Claire play, and practiced with total dedication,
between three and six hours a day. Initially I focused on classical music, but
quickly I expanded to jazz. A friend who had a phonograph invited me
over and put on a record of Benny Goodman and his orchestra playing
"Sing, Sing, Sing," and instantly I was hooked.
It was a thrilling time in music. Goodman and Artie Shaw and Fletcher
Henderson had sparked a new era by combining 1920s dance music with
elements of ragtime, black spirituals, blues, and European music to create
the so-called big-band sound. It was so popular and influential that in 1938,
Goodman and his orchestra were invited to play the first nonclassical concert
at Carnegie Hall. I took up tenor sax in addition to clarinet—to my ear,
sax was the most satisfying, jazziest element of the big-band sound.
One of my heroes was Glenn Miller, who gave the music a new, velvet
dimension by grouping a clarinet with two alto and two tenor saxes in his
band. In 1941, when I was fifteen, I took the subway to the Hotel Pennsylvania
to hear his band play. I was able to maneuver myself right up next to
the bandstand, just ten feet from Glenn Miller himself. The band started to
23
THE AGE OF TURBULENCE
play a dance arrangement of Tchaikovsky's Sixth Symphony. I piped up,
"That's the PathetiqueY> and Miller looked over at me and said, "That's terrific,
kid."
George Washington High School, about a mile and a half from our
apartment, was one of the city's largest and best public schools. When I
started in the fall of 1940, it had room for three thousand students, including
the night school, but many more of us attended. If you were from outside
the neighborhood, you had to compete for admission, and the classes
were fiercely competitive. Partly this was because of the Depression: many
of us felt we weren't starting with any advantages, so it was imperative that
we work hard.* There was also the added uncertainty of war. Although
Pearl Harbor was still more than a year away, Nazi Germany had just conquered
Western Europe. The radio was full of news of freighters on the
Atlantic being sunk by U-boats, and crackly transmissions from Edward R.
Murrow reported on London under siege by the Luftwaffe.
We were particularly conscious of the war because our classes had
swelled with refugees—mainly Jews whose families had fled the Nazis a
few years before. Henry Kissinger was a senior when I enrolled, though we
were not to meet for three decades. I remember sitting in math class with
John Kemeny, a Hungarian refugee who would one day become Albert
Einstein's mathematical assistant and who would coinvent the BASIC
computer language with Thomas Kurtz (and still later become president of
