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From his trademark black-rimmed glasses to his heavy use of oblique Fedspeak, Alan Greenspan looks like a nerdy economist lost in a world of heavy-truck production reports. Yet the Federal Reserve chairman's success derives as much from his shrewd reading of the political tea leaves as from his economic analysis. ''He not only knows the numbers, but the music too,'' says longtime friend James A. Johnson, CEO of Fannie Mae Corp. ''He has an innate sense for anticipating the political reactions before they happen.''

As a child growing up in Manhattan's Washington Heights section, Greenspan had an obsession with, well, numbers and music. ''He knew everyone's batting average in the Major Leagues,'' recalls cousin Wesley Halpert, a prominent New York dentist, who says young Alan was a nimble dancer and good musician. Greenspan studied briefly at the Juilliard School of Music in the mid-1940s before touring the country playing bass clarinet in Henry Jerome's swing band. Now friends occasionally coax him to improvise a little jazz piano after dinner.

RAND FAN. By his mid-20s, Greenspan turned from music to economics--and the virulently antigovernment views of philosopher-novelist Ayn Rand. Greenspan became a regular in her salon in the 1950s and remained in touch until her death in 1982.

In 1954, Greenspan formed the New York-based economic consulting firm of Townsend-Greenspan & Co., which he headed for 30 years. Eventually, though, Greenspan began spending more time in Washington, including serving as an adviser to Richard M. Nixon's 1968 campaign. In 1974, then-White House Counsel Leonard Garment, a former Henry Jerome bandmate, offered Greenspan the job of chairman of the Council of Economic Advisers. Although Nixon had resigned by the time Greenspan was confirmed, Ford kept him as CEA head. He returned to economic consulting after Jimmy Carter's election, but once Reagan took office he became a valuable White House adviser.

Although he professes to dislike the social scene and is awkward at small talk, Greenspan nonetheless is ubiquitous on the cocktail circuit. Why? To gather political intelligence. He also can be found on the tennis court or golf course with power brokers such as Arthur Levitt Jr., chairman of the Securities & Exchange Commission, and House Budget Committee Chairman John Kasich (R-Ohio).

A peek inside Greenspan's office shows the extent of his political connections. On the walls are photos of him with Boris Yeltsin, Margaret Thatcher, and the four U.S. Presidents who have sworn him into office. The photo with Clinton is autographed: ''Alan, here you are pointing LEFT--a new direction for you?'' On Greenspan's bookshelves, tomes on economics by the likes of Stanford University economist John B. Taylor rub spines with political titles, including Bob Woodward's The Agenda--which treats Greenspan prominently and favorably.

Greenspan starts each day at 5:30 a.m. with a two-hour soak in the tub--a remedy prescribed by his doctor 25 years ago for a bad back. It's his most productive work time: He pores over countless memos and reports. ''The unsung hero at the Fed is the assistant who has to read his waterlogged scribblings,'' jokes Andrea Mitchell, the NBC correspondent who married Greenspan in April after a 12-year courtship.

Despite his extensive networking, Mitchell says her husband is happiest spending a quiet night at home: ''It's a close call whether the house will be filled with Vivaldi or the [Baltimore] Orioles.'' And friends say the 71-year-old Fed chief's recent marriage, his second, has brought out a new personal dimension. ''There's been a noticeable element of spiritual renewal,'' says a close friend. Still, Mitchell says, work is never far from his mind: ''The man just loves what he's doing.''

By Dean Foust, with Owen Ullmann, in Washington

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Updated July 4, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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