Monday, September 15, 2008

Greenspan Laments Faltering Economy He Created And McCain's Wish To Continue It

Alan Greenspan rightly slammed McCain for his proposal to lower taxes again for the rich while not reducing spending. It is just idiotic to keep borrowing money from other countries at the rate that we do and not expect dire consequences to our market. Now that "Black Monday" is upon us and European markets are already off by five percent, we are about to get a taste of what McCain wants to continue.

From The Huffington Post:

Former Federal Reserve Chairman Alan Greenspan offered a woeful outlook of America's economic situation on Sunday, saying the crisis with the country's financial institutions was as dire as he had ever seen in his long career, and predicting that one or more of those institutions would likely collapse in the near future.

"Oh, by far," Greenspan said, when asked if the situation was the worst he had seen in his career. "There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system."[...]

In light of these dynamics, Greenspan noted that the government was left with tough decisions: which institutions are "so fundamental to the functioning" of society that they demanded a federal safety net? Earlier in the week, the former fed chairman noted that such choses extended to tax policy as well. In an interview with Bloomberg Television, Greenspan argued that the country couldn't afford the tax cuts being proposed by John McCain without an equally massive reduction in spending.

"I'm not in favor of financing tax cuts with borrowed money," he said. "I always have tied tax cuts to spending."

Now those comments are well and good now, but Greenspan did not admit to all the trouble he helped create throughout his tenure as Federal Reserve Chairman. Entire websites are dedicated to chronicling his failure to guide our economy away from exactly what he is decrying now. We've been borrowing for far too long and now multiple factors are helping take down an Investment Bank institution that has stood on Wall Street since 1850. The same factors led to Merrill Lynch selling itself to Bank of America and now Washington Mutual threats of going under as well.

We are in a serious economic crisis and any Republican (like McCain) that says the fundamentals are strong have no right to be near any levers of power that can affect the teetering system. The rich can always ride out downturns like this, but they don't give a shit about the poor...don't expect McCain to be any different. As for Greenspan, he helped start this mess so for anyone to be listening to him without a skeptical ear is just beyond absurd.