Alan Greenspan Admits He Isn't God

For far too long, Alan Greenspan was considered a financial deity for leaders on both sides of the aisle. He was there for Bush Sr., Bill Clinton and until Bernake stumbled in, for the current failure-in-chief. As the head of the Federal Reserve Board, Greenspan helped direct and advocate for deregulation in the market. Unfortunately for the great majority of us, politicians happily followed his advice and were paid handsome rewards by the financial sector. Now that we are seeing the consequences of those policies reverberate through the economy everyone is looking for answers, even the man who had the wrong ones for all these years.

From The NY Times:

Although he defended the use of derivatives in general, Mr. Greenspan, who left office in 2006, told members of the House Committee of Government Oversight and Reform that he was “partially” wrong in not having tried to regulate the market for credit-default swaps.

But in a tense exchange with Representative Henry A. Waxman, the California Democrat who is chairman of the committee, Mr. Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Reading these words, I have to shake my head in disbelief. How can someone that is considered so smart not know that the greed of the rich will ultimately bring us all down in flames? Putting a value on debt that is worthless is absolutely ridiculous when the chance of it crumbling is greater than a house of cards exposed to the wind.

I honestly do not think Mr. Greenspan is such a fool, he should most certainly be aware of what his tenure has helped to "accomplish" in our country over the last twenty years. Greenspan must certainly have made quite a deal of wealth in his time with his policies that have made so many of us poor. Deregulation stripped away the protections in the market that were instituted to prevent the crisis of the Great Depression. They were put there for a good purpose Mr. Greenspan and the only reason to get rid of them is to re-enact the boom of the 1920s while recklessly disregarding the consequences in the 1930s.

Now it does not please me to see Greenspan's heavenly aura stripped away in such a manner that Waxman provided today. He certainly deserved it but the truth is that he should have never been given the throne that was given to him by either party.

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.