On the morning of Tuesday, August 18, 1987, Greenspan walked through the door of his private office and into the adjoining massive conference room at the vast marble Federal Reserve headquarters on Constitution Avenue in downtown Washington, D.C. He had been chairman of the Fed for less than one week. Gathering in the stately meeting room were the members of the Federal Open Market Committee (FOMC), which Greenspan now chaired.
The FOMC is an unusual hybrid consisting of 12 voting members -- all 7 Fed governors plus 5 of the 12 presidents from the Federal Reserve district banks around the country.
At its regularly...