Comments by:Alan GreenspanFormer Chairman of the Board of GovernorsFederal Reserve SystemWashington, DC

On Friday, May 19, Former Fed chief Alan Greenspan spoke before a crowd of Manhattan commercial real estate executives at CB Richard Ellis’ annual Forecast Breakfast. After initial remarks that centered largely on the challenges of oil supply and demand, Greenspan settled down for a one-on-one interview moderated by Boston Properties chairman Mort Zuckerman. Zuckerman asked Greenspan a range of questions, dealing with issues ranging from the housing bubble to interest rates. But the question that held the most intrigue focused on the macro-economic picture and the dangers that lie ahead. Following are excerpts from Greenspan’s thoughts on the question as well as some reflections on the housing bubble:

“Our major problems are not economic but political. On Medicare we have already severely over-committed to the next generation. Congress can make promises, but few people are estimating properly concerning the needs of retirees and the existing workforce in the generation after the baby boomers. We will have to have doctors, nurses, hospitals and an array of medical services. But supplied by whom?

“Another problem is education. We’re not training our people sufficiently in needed skills, and our failure to bring people through school and into college leaves a disproportionate part of our workforce in unskilled areas where they will be needed less. We need to figure out why our fourth-grade students seem to do reasonably well, but by the 12th grade they’re at the bottom of the heap.

“In terms of a housing bubble, the bottom line is that the boom is over. The froth that concerned me a few years ago is deflating. The cause of the bubble was an extraordinary surge in investment housing, and the result was that the turnover rate was going up. Now we’re starting to see prices flattening, but they’re coming down gradually.

“The UK and Australia can actually be models for the way the situation will shake out in the United States. They both had a much bigger boom, but prices just flattened and now they’re actually coming back. We ought to be able to work our way through this without significant problems.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.