Some economists say Greenspan himself had considered trying to tame the market's frenzy but backed away after the storm raised by his famous question in December 1996 about whether it was possible to know when markets were in the grip of "irrational exuberance."
"Greenspan made one effort to tackle the bubble and when he did the whole world came down on him asking what right he had to substitute his judgment for thousands of investors," said David Jones, whose third book on the Greenspan Fed will be published this month.
Greenspan's supporters say a chief reason that Greenspan cited during the boom years for leaving interest rates alone has proved -- that the country had entered a new era of higher productivity growth.
Because of this belief that American workers were becoming more efficient, Greenspan was willing to let the good times roll and watch as the economic boom pushed unemployment to a three-decade low of 3.9 percent. That was far below the 6 percent floor once viewed as the point when tight labor markets began to push up inflation.
This job prosperity would have been jeopardized if the Fed decided to raise interest rates to slow stock prices, supporters argue.
"In the 15 years he has been chairman of the Fed, the US has had only two mild recessions, remarkably low inflation and stronger economic growth than most people might have felt was possible," said Michael Mussa, former chief economist at the IMF. "Overall, his record has been very good."
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