Columbia Business School Professor Abby Joseph Cohen Talks Alan Greenspan, FOMC

Summary

---

Episode Overview

Podcast: Bloomberg Talks
Episode: Columbia Business School Professor Abby Joseph Cohen Talks Alan Greenspan, FOMC
Date: June 26, 2026
Theme:
This episode features a deep dive with Professor Abby Joseph Cohen, renowned economist, former Goldman Sachs strategist, and current Columbia Business School professor. The discussion revolves around her personal interactions with Alan Greenspan, the evolution and challenges facing the Federal Reserve (FOMC), the importance of data quality, current dilemmas in economic policy, and the critical role of financial literacy. The tone is insightful, candid, and at times personal, with Cohen blending historical reflection with present-day analysis.

---

Key Discussion Points and Insights

1. Personal Reflections on Alan Greenspan

Timestamps: 00:26–01:48

• Anecdotes of Interaction:

  • Cohen recounts moderating a panel for Greenspan's recent book on capitalism in the U.S., emphasizing his enduring sharpness and focus.
  • Greenspan’s key concerns included U.S. budget deficits and Social Security sustainability.

• Quote:

  • "There were two personal episodes that I had with Alan and both of them left me smiling when I thought about it...one of his concerns had to do with budget deficits and also Social Security." — Abby Joseph Cohen (00:51)

---

2. Greenspan’s Legacy and Regulatory Concerns

Timestamps: 01:48–02:53

• On Regulation:

  • Cohen notes that Greenspan and the FOMC were aware of growing issues in the housing and subprime credit markets. She highlights that Greenspan’s “irrational exuberance” speech, often thought to be about equities, was in fact about the fixed income markets and inadequate risk premia.

• Quote:

  • "I think that speech was largely about fixed income markets. He was concerned, for example, about the inadequate risk premia in corporate bonds." — Abby Joseph Cohen (02:21)

---

3. Greenspan as a Lens on Today’s Fed

Timestamps: 02:53–03:46

• Long-Term Focus:

  • Greenspan cared little for short-term movements and favored understanding deep, structural changes in the economy.
  • Cohen recalls a 1990s discussion on how technological change was undermining the relevance of existing economic data, which remains an issue today.

• Quote:

  • "He and the team spent a great deal of time looking at economic developments, what was happening not month to month, but the underlying structure." — Abby Joseph Cohen (03:10)

---

4. Limits of Economic Data and The Danger of Outdated Metrics

Timestamps: 03:46–05:04

• Data Caution:

  • Cohen stresses that economic metrics like GDP are based on samples and lag reality; it can take years to understand true trends.
  • She warns that relying on outdated industry data leads to major blind spots.

• Quote:

  • "Very often we forget that GDP and so many of the other statistics are samples...if those samples are based upon the companies and industries that used to be important...we mislead ourselves in terms of what's going on." — Abby Joseph Cohen (04:44)

---

5. Current Dilemmas Facing the FOMC and Data Quality

Timestamps: 05:04–06:20

• Data and Staffing Challenges:

  • The Fed is setting up new task forces on data analysis and quality, which Cohen strongly supports.
  • The Bureau of Labor Statistics is underfunded, handicapping quality at a time of growing economic complexity.

• Quote:

  • "At a time when the economy has gotten more complicated, more tied into the global economy, we need more information, not less. We're getting less information." — Abby Joseph Cohen (06:10)

---

6. Market Optimism, Valuation Concerns, and Recurring Patterns

Timestamps: 06:20–07:53

• On Market Conditions:

  • Discussing the Ibbotson chart, Cohen identifies the present as an inflection point: valuations are high, and “when things are priced to perfection, that's when investors need to be concerned and careful.”
  • While "this time is different" is a popular refrain, core fundamentals—like corporate profitability and job creation—remain essential, and the U.S. is currently underperforming in job growth.

• Quotes:

  • "Right now, the valuations basically say everything's fabulous. And when things are priced to perfection, that's when investors need to be concerned and careful." — Abby Joseph Cohen (06:54)
  • "There are always differences, but there are some things that are standard and basic...we are not creating sufficient jobs." — Abby Joseph Cohen (07:29)

---

7. The Importance of Financial Literacy and Entrepreneurship

Timestamps: 07:53–08:58

• Education Trends:

  • Cohen praises New York’s move to require personal finance education for high schoolers and highlights entrepreneurship programs like the one at Cornell Tech.
  • Advocates for broader financial education across ages, not just youth.

• Quote:

  • "It's not just the young people, it's also people in middle age who don't know enough about personal finance. So the sooner the better." — Abby Joseph Cohen (08:19)

---

8. Public Frustration with Capitalism and Economic Policy

Timestamps: 08:58–10:11

• On Discontent:

  • Responding to public skepticism about capitalism, Cohen attributes frustration to sluggish job and wage growth leading to stress across the political spectrum.
  • She calls for leaders to focus on expanding the economic "pie" instead of just sharing it differently, noting ongoing and severe distortions in income and opportunity.

• Quote:

  • "When there is stress, be it either on the right or the left, there is a worry and a concern about what to do next. I hope that business leaders and political leaders will come together and recognize the focus has to be on growing the economy rather than just rearranging the slice of the pie." — Abby Joseph Cohen (09:30)

---

9. Memorable Moment – The Mets Job Offer?

Timestamps: 10:11–10:30

• Lighthearted Banter:

  • Tom Keene jokes about Cohen becoming the Mets’ manager.
  • Cohen, a self-professed “Queens girl and a Mets fan,” declines, noting expertise matters.

• Quote:

  • "I am a Queens girl and a Mets fan. However, I am not sure that I'm the right person. I like to stick with things that I really know a lot about." — Abby Joseph Cohen (10:21)

---

Notable Quotes

• "GDP and so many of the other statistics are samples...if those samples are based upon the companies and industries that used to be important...we mislead ourselves in terms of what's going on." — Abby Joseph Cohen (04:44)
• "Right now, the valuations basically say everything's fabulous. And when things are priced to perfection, that's when investors need to be concerned and careful." — Abby Joseph Cohen (06:54)
• "It's not just the young people, it's also people in middle age who don't know enough about personal finance. So the sooner the better." — Abby Joseph Cohen (08:19)

---

Episode Flow and Tone

The conversation blends professional analysis, institutional memory, and wry humor. Cohen reinforces the stakes surrounding financial data accuracy, regulatory awareness, and education—arguing that these perennial issues are even more urgent as the economy and society grow more complex and interdependent. The episode is accessible to listeners with a range of financial expertise, combining history, policy dissection, and practical advice.

---

Recommended Listening Segments

• Anecdotes about Greenspan and the meaning of "irrational exuberance": 00:51–02:53
• Discussion on the lag and limitations of economic data: 03:46–05:04
• Current dilemmas for the Fed and why data matters: 05:08–06:20
• Commentary on personal finance education and opportunity gaps: 07:53–09:30

---

Transcript

[Indiana University Narrator]

Indiana University strengthens tomorrow's workforce with practical real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact,

[Abby Joseph Cohen]

Bloomberg Audio Studios Podcasts Radio News she is simply iconic.

[Tom Keene]

Abby Joseph Cohen was with Goldman Sachs for years. Definitive on the equity markets. Opin for the bears. Beaten up on her constantly as the market went up and up. We'll show a great chart of that here in a moment. And then wandered to something more magical. Columbia Business School teaching grizzled graduate students. What did you thrill to have here? What did you say to the graduate students this week about Alan Greenspan?

[Abby Joseph Cohen]

Well, first of all, Tom and Lisa, I'm delighted to be here with you today. There's so much to say about Alan Greenspan and so much has already been said. There were two personal episodes that I had with Alan and both of them left me smiling when I thought about it. And let me discuss the first one, which is the more recent one. Not that long ago, just a handful of years ago, Alan published a book that he had co written with Alan Woodridge Wooldridge rather from the Economist, about capitalism in the United States. And it was so incredibly sharp, they asked me to moderate the panel. And the discussion with him at that point was right on, on topic. And to your point, one of his concerns had to do with budget deficits and also Social Security.

[Tom Keene]

I look at Alan Woodridge, his work with our editor in chief John Micklethwait, and it is that horse historical construct the Greenspan critics will say he got wrong. Regulation. Did you perceive that while sitting at Goldman Sachs?

[Abby Joseph Cohen]

When I met with Alan and other members of the fomc, I did talk about the regulatory aspect. And the thing that was interesting to me is that they were well aware of some of the problems that were developing in the housing market, for example, and in the subprime credit market. And that was his biggest concern. You know, the so called irrational exuberance speech which so many people think was about the stock market. I had met with him just a few days before. I think that speech was largely about fixed income markets. He was concerned, for example, about the inadequate risk premia in corporate bonds. He was also concerned about the inadequate risk premia in sovereign markets outside the United States, particularly for some of the smaller, newer countries that had not yet established themselves or established their credibility.

[Lisa Abramowicz]

Can you explain why Greenspan, why he's, he's, he's key to understanding today's Fed?

[Abby Joseph Cohen]

Yeah, I Think that his approach was an important one. First of all, very long dated, he wasn't terribly interested in the short term market moves either in stocks or bonds, number one. And number two, he and the team spent a great deal of time looking at economic developments, what was happening not month to month, but the underlying structure. And one of the conversations I remember most with with Allen and the FOMC had to do with work that I had done in the early 1990s about the technological changes underway in the US economy, what that meant in terms of providing problems analyzing data because we weren't collecting the data properly.

[Tom Keene]

It's like she knows her script. It's like she was in the planning meetings for Bloomberg Money. Let me do this, Abby. I got to bring this up. Abby. This is from her most famous paper on Aristotle and it's giant Peter Bernstein. It is one thing to set up a mathematical model that appears to explain everything that sounds familiar. Our lives teem with numbers, but we sometimes forget that numbers are only tools. That's where we are right now, isn't it?

[Abby Joseph Cohen]

That's exactly where we are. And the training I received as a junior economist at the Fed helped set me up in terms of looking at things in that way. In addition, looking at the economy in the 1990s, recognizing that economic data were not picturing and not capturing what was happening in the newer, faster growing segments of the economy. The same thing is happening right now. Very often we forget that GDP and so many of the other statistics are samples.

[The Hartford Narrator]

Right.

[Abby Joseph Cohen]

We won't know for three years or four years what the real numbers were because we're working off of samples. And if those samples are based upon the companies and industries that used to be important rather than the ones that are important or will become important, we mislead ourselves in terms of what's going on.

[Lisa Abramowicz]

Would you be able to dig into some of the dilemmas that are facing the current fomc?

[Abby Joseph Cohen]

They have many. Yes, many. Where do I start? That's right.

[Tom Keene]

And it's going to take the rest of the program.

[Abby Joseph Cohen]

I'll try to be brief. You know, we all know that's a first. Please give me another two hours. You know, Kevin Marsh has announced setting up new task forces and one of those has to do with data analysis and data quality. And I give him a hats off on that because it's really truly needed. There are some fabulous people at the Fed who work on data all the time. And to recognize that they need some additional assistance in terms of identifying which are the data items, statistics that are really important. And if I can point out that we've not done a good job as a nation on this. The Bureau of Labor Statistics that we rely on so much has been underfunded, not just in this administration, but going back several years. So at a time when the economy has gotten more complicated, more tied into the global economy, we need more information, not less. We're getting less information.

[Tom Keene]

I've got to squeeze this in here. We're going to come back with Abby Joseph Cohen. But this is definitive. It's the ibn, the Davidson chart of Yale University. It was definitive, I'm going to say, 30, 40 years ago. Roger Ibbotson, Abby Joseph Cohen helped codify this. This is a logarithm chart. Slope matters, as my friend Brian Sullivan used to tell me. The Depression in the lower left corner, the Guadalcanal Low of 1942, and up, up in a way with the optimism of Abby Joseph Cohen. Do we still have the optimism of the Ibbotson chart?

[Abby Joseph Cohen]

I think we're at an important point of inflection now, Tom, because you mentioned the CFA program. I'm a cfa. I was chair of the board of the CFA Institute. So I believe in digging through the numbers and digging through valuation. Right now, the valuations basically say everything's fabulous. And when things are priced to perfection, that's when investors need to be concerned and careful.

[Tom Keene]

I mean, I look at this, Abby, and we have to be quicker. And I want to come back with you, but the fear that's out there now is an original fear. Is this time different?

[Abby Joseph Cohen]

To borrow from Rogoff, there are always differences, but there are some things that are standard and basic, including corporate profitability, corporate balance sheets, and the underlying strength of an economy, which is measured not just in GDP and industrial production, but also job creation, and we are not creating sufficient jobs.

[Lisa Abramowicz]

Abby Joseph Cohen, Columbia Business School. Everyone knows you from Goldman Sachs as well your time there. I want to start with personal finance. You have, you know, graduate students, MBA students. I actually did a story where it was about the high school students and how the rules are changing. Come the fall, they're going to be mandated to take personal finance or have some kind of experience exposure for it in order to graduate. Do you think this is a good thing, getting them started younger and younger into the personal finance?

[Abby Joseph Cohen]

I think it's a fabulous idea because one thing we do know, it's not just the young people, it's also people in middle age who don't know enough about personal finance. So the sooner the better. The other Thing that's happening in the city of New York revolves around the Cornell Tech campus, which is on Roosevelt island, where there is now a program on entrepreneurship for high school students. Clearly, growth in this city and growth throughout the economy will depend upon knowledge of personal finance knowledge and interest in entrepreneurship. And I think that educational institutions are getting their act together.

[Tom Keene]

So Abby, what's so important here to Lisa's great question? I think of Rebecca Patterson providing real leadership on this to kids in education is you're getting more knowledgeable about innovation on an island of Cornell, we're getting more knowledgeable at Columbia about personal finance, etcetera, etcetera. And yet we've got a politics in our cities, including New York City, that doesn't like capitalism. I'm not sure they like innovation. What are your thoughts on the swing that we see of a large body of our public? They say capitalism has failed.

[Abby Joseph Cohen]

I think many people are responding to the idea that there has been sluggish job growth, there has been sluggish wage growth, and people are feeling stressed. And when there is stress, be it either on the right or the left, there is a worry and a concern about what to do next. I hope that business leaders and political leaders will come together and recognize the focus has to be on growing the economy rather than just rearranging the slice of the pie. Although with regard to the slice of the pie, clearly we are seeing a very significant distortion, something very dramatic over the last 10 to 15.

[Tom Keene]

Can I do an audible, Lisa?

[Lisa Abramowicz]

Of course.

[Tom Keene]

There's a job opening. Abby, I don't know if you're aware that the New York Mets fired their manager. I can see you slotting in there with Mr. Cohen.

[Abby Joseph Cohen]

Well, I am a Queens girl and a Mets fan. However, I am not sure that I'm the right person. Person. I like to stick with things that I really know a lot about.

[Tom Keene]

Well, okay, we'll try that. But we'll see if the dreaded mess can do better. Certainly doing better than the Red Sox. Abby Joseph Cohen with us today. Thank you so much for joining us forever with Goldman Sachs and her Columbia University.

[Indiana University Narrator]

Preparing for tomorrow's careers requires forward thinking education. Indiana University graduates are degrees above the competition, building on strong foundations to create new possibilities that make a difference where you live. IU trained nurses practice simulated emergencies before setting foot in a hospital. Future teachers gain guided classroom experience through IU before graduating high school. And IU engineering students solve modern technology challenges through cutting edge microchip research that impacts everything from cell phones to space travel. Developing a talented workforce isn't a side effect of an IU education, it's the outcome. Learn how IU supports workforce development at iu. Edu Impact when you're running a business,

[The Hartford Narrator]

the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more@the Hartford.com riskmitigation policies provided by Hartford Fire Insurance Company and its property and casualty affiliates Hartford, Connecticut.