Comm Lessons from Alan Greenspan
Former Federal Reserve Chairman Alan Greenspan’s death at 100 is an opportunity to talk with students about two communication lessons: the power of his words and his choice to be unclear.
Words That Moved Markets
For decades, “his words moved markets,” but perhaps Greenspan’s most famous phrase is “irrational exuberance” from a 1996 speech:
We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy?
After that speech, global markets opened between and 2 and 4% lower, although they did recovery quickly. Some analysts are drawing analogies between the dot-com bubble of the late 1990s, the housing crisis of 2007-2008, and the AI hype today, calling each irrational exuberance.
Intentionally Unclear Language
On a PBS News Hour segment, a reporter explained:
[He] would let his sentence sort-of go around with multiple subclauses, and it would just be incomprehensible. It was a tactic and a very successful one.
Greenspan acknowledged the strategy:
I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said. (1987 to a Senate Committee)
One of the problems that surprised me when I got into public life was that open, clear talk is—often creates problems. (2007 PBS News Hour interview)
[Asked about “fed-speak”] It’s a—a language of purposeful obfuscation to avoid certain questions coming up, which you know you can’t answer, and saying—“I will not answer or basically no comment is, in fact, an answer.” So, you end up with when, say, a Congressman asks you a question, and don’t wanna say, “No comment,” or “I won’t answer,” or something like that. So, I proceed with four or five sentences which get increasingly obscure. The Congressman thinks I answered the question and goes onto the next one. (2007 CNBC interview)
A Forbes writer discusses fed-speak (aka “Greenspeak”) and the pendulum of transparency over time. In business communication, we talk about transparency as an aspect of integrity. Greenspan’s approach might be challenging for students to reconcile.