ALAN GREENSPAN

By GEORGE J. CHURCH

A newlywed at the age of 71, some 44 years after his first marriage was annulled, an admirer of high tech who nonetheless drafts speeches in longhand, a Republican who gets along better with the Clinton Administration than he ever did with its G.O.P. predecessors, Alan Greenspan has long been a man of surprises. But none is more startling than his recent transformation in the public mind. Back in 1994, when he was engineering a series of interest-rate increases, the Federal Reserve chairman was regularly assailed as a zealot willing to strangle economic growth in pursuit of a chimerical goal of zero inflation. Today those jeers have melted to mild sarcasm. ALL HAIL SAINT ALAN, read buttons distributed by Bert Ely, an economic consultant who contends Greenspan is getting undeserved credit for the happy state of the U.S. economy. But to admirers, Greenspan is a monetary wizard. Says economist Allen Sinai: "The Greenspan Fed is the all-time champion in American history."

So what has Greenspan done to earn such raves? Lately, errr... well...nothing. During the past 23 months, the Fed has made only one change in interest rates: a quarter-point increase last March. But standing pat in this case is a positive accomplishment. Greenspan has resisted pressure from nervous Nellies inside and outside the Fed to slam a monetary brake on the economy. The nation's foremost inflation hawk now seems to accept the idea that unlike in the past, deep changes in the economy have made sustained growth possible without pushing prices up.

To be sure, Greenspan would never say that--or anything else so explicit. He once quipped that on taking over the Fed in 1987, he learned "to mumble with great incoherence." Nor does he buy the wildest new-economy talk. He dismisses as "less than credible" any idea that "we need no longer be concerned about the risk that inflation can rise again." Greenspan is on guard, a renowned numbers cruncher who keeps tabs on the most obscure corners of the economy. Robin Leigh-Pemberton, former governor of the Bank of England, once remarked that at conferences Greenspan was likely to back up his predictions by citing such obscure data as vacuum-cleaner sales in Iowa.

Greenspan can also claim credit for knowing when to declare victory and go home. It is unclear whether he ever seriously thought inflation could be brought down to zero. But he seems to realize that the present rate of about 2% is close enough to fulfill his stated ambition to keep price increases so small that they do not drive business decisions--that nobody feels impelled to buy or build before the price goes up.

Ever cautious, Greenspan warned in October that labor markets were tightening at an "unsustainable" pace. And he has never recanted his belief that the Fed should tighten credit mildly at the first signs of renewed inflation. But for now the Asian crisis has put on the shelf any plans for an interest-rate boost. Maybe the good times can roll a little longer.

--By George J. Church. Reported by Adam Zagorin/Washington

With reporting by Adam Zagorin/Washington