When things are riding high and everything is going far beyond your wildest dreams, it is not part of human nature to question the good fortune, boom times, all that seemed to be going right because, we all, particularly Mr. Greenspan, believed it was all part of the economic cornucopia that was the American dream.
Reading through the article I got the impression that Greenspan really didn't know what he was doing, that he simply happened along at the most lucrative period in American history that would remained essentially the case no matter what decisions he made. The worst, most tragic mistake was that he believed he knew what he was doing and took the accolades, credit for it all, until it ended, circumstances which made him all the more confused and baffled, and along with it unanimity in which he was discredited, blamed for what happened.
Now, he's back trying very hard to concoct the unseen economic mechanisms that were lurking in the darkness in desperation to restore of his vainglorious ego in the hope he can exonerate himself. But, my sense is that he doesn't come across very convincing.
I've been in FreeRepublic for a few years, and in all that time I've read perhaps hundreds of 'after the fact' "reports" of what;
went wrong, went right, could have been, should have been
etc. .... you get the picture.
....and it is always ... after the fact.
The men that initiated the momentum that birthed the United states were sober and wise and really DID have a good idea ... and they really believed men would follow them and produce the greatest land on the planet.
We've apparently devolved from wisdom to mediocrity to cartoon because people supposedly wise ... are not ... supposedly capable ... are not ... supposedly mature ... are not.
Sadly ... men that were supposed to be religious ... are not and THAT is the root of our downfall.
We no longer believe in God (as a nation), for if we did, we would HAVE the spirit of discernment and KNOW whom to elect and whom to eject.
I believe we'd also have the righteousness of God in our hearts as we warred against the enemies of America.
As it is ... we do nothing ... we are dead and don't know it ... or we DO know it ... and don't care.
God have mercy and help us our unbelief.
Greenspan acts as though he himself discovered the role of human nature in economics. This is the arrogance of most economists who consider their discipline a ‘science’. Human systems cannot be forecast with any precision solely by mathematics. It’s like a meteorologist who never looks out of the window.
He seems to have learned little from his friendship with Rand. I never bought into her Objectivist philosophy, but her insights into and portrayal of the grubbing nature of moochers and politicians is dead on and timeless.
5.56mm
I got the same impression. All those models they used don't work. And Ayn Rand philosophy of the irrational side of human behavior all of a sudden seems full of wisdom and was right after all. He's shock he could have been so wrong! I wondered if he see the mistake he made in marrying Andrea Mitchell.
Ayn Rand used to call Alan Greenspan “The Undertaker”. That was when he was in his twenties.
Usually you can judge a man by whom he marries.
I recall widespread concern and near-panic in many circles regarding the very obvious distortion and misallocation of the housing sector from 2003 - 2007, begging him to back off the rate stimulus before the bubble inflated to dangerous proportions. This he did not do until derivatives started to unravel due to “unanticipated” defaults and he over-corrected even at that, making a bad situation with largely speculative, interest-only ARM loans even more dire.
I recall thinking at the time that the old fool really never got over Ayn Rand as most students enamored of her writing do after entering adulthood, and that he was intentionally doing this in a mistaken attempt at crashing the insufficiently libertarian old economic order.
I recall hearing Bernanke prattling on about inequitable distribution of incomes during his confirmation hearings, and knew then that the socialist eggheads had seized the reins.
Greenspan was and is a fool, but a lucky one. Well, with one exception. Angrea Mitchell. Being married to that sour harridan has to be pure living hell.
“...critics have said the increased money supply and low interest rates during his tenure at the Fed from 1987 to 2006 led to bubble investments.”
Take it from someone that was on the front lines of the housing bubble...increased money supply and low interest rates were the EXACT reason the bubble expanded and exploded (well, if you don’t include greed).
Most people are not going to purchase a home with 100% financing (or even more), and feel any remorse at walking away from the home/loan if things go sour.
Teaser rates, subprime mortgages and other lending chicanery proved to be too much for the low-economic-info homebuyers, and they were swept up into the massive clarion call of “everyone has a right to own a house”. Anyone that could fog a mirror, was told where to sign and Voila!...they were homeowners.
When the realty sunk in, and the newly anointed homeowner was faced with making a house payment or buying that widescreen TV...guess which one lost?
Greenspan babysat and watched that situation unfold...for years...and did nothing about it.
I think Alan Greenspan is lying and trying to cover up (yes, AFTER the fact).
He is far too intelligent NOT to know that a major crash was coming.
And, just who are YOU to question him?
This is why I prefer to get forecasts from John Williams at shadow stats: http://www.shadowstats.com/.
And, I continue to buy gold and silver despite what government pundits say about them being “junk.” Looking at how this government has shaped up, I continue to follow the anti-government advisers who suggest investing in precious metals, iron and war industries (makers of ammunition and guns for war and personal use) and anything else that hedges against the constant debasement of the currency. Gold has doubled in price since obama came to office.
I’d like to see Greenspan’s portfolio and investment profile — think he’s got a some precious metals in there somewhere?
Instead of pondering “what went wrong”, we should be pondering what’s about to go wrong. We are at near depression level unemployment (if you count the people who are working age and able but unemployed), yet the stock market is a record highs.
This is probably not an indication of a healthy economy.
His adoption of rational economic determinism is straight from Karl Marx.
His "success" was because, unlike today's partisans, he did try to please both Democrats and Republicans, thus keeping the balls in the air.
This quote reveals far more than it seems to:
"It used to be a ritualistic 50-50 at parties — the doyennes of culture and partying were very strict about bipartisanship," he adds. "That doesn't exist anymore."
“politics is broke.”
He doesn’t seem to understand that there are two diametrically opposed world views in politics today - those wanting a restoration of our constitutional republic, and those wanting a full-blown socialist state. We will either have a civil war, or one side will give up.
Zero blame on the Banks and their Real-Estate assessor toadies.
Greenie is showing himself to be yet another bank-crack licker.
Now I don’t blame it entirely on the banks - the benefits and the easy money have alot to do with it also.
You don’t have to work so hard if you have tons of bennies.
And why save to buy something in the future when easy money policies allow you to borrow and get what you want today?
There’s more than enough blame to go around.
But no doubt Congress, who has a RESPONSIBILITY to “coin money and regulate the value thereof”, has miserably failed, almost to a treasonous level!
Alan Greenspan destroys America by urging more home owners take out adjustable rate mortgages...and then hiking those rates by 4.5% in the next 6 months. Thanks Alan!
He’s right. The entitlements and benefits are the main cause of the outrageous pile of debt, and prostitutes who’ve sold themselves portions of it won’t like that kind of statement from any man.
He’s right. The entitlements and benefits are the main cause of the outrageous pile of debt, and prostitutes who’ve sold themselves for portions of it won’t like that kind of statement from any man.
[I forgot the word, for. It’s a necessary word.]
Yup, he caught the wave of Baby Boomers who suddenly woke up to the fact that they were in their 40’s and 50s and had squandered their incomes on toys and fun and had accumulated little to no retirement funds, and needed to build up an investment portfolio overnight.
Just like all the Baby Boom fads, the simultaneous, large collective swing to investing by the huge Baby Boom Demographic created a stock market bubble and Greenspan enabled the over expansion of that bubble by his fiscal policies.
The same moronic Baby Boomers running our Industry allowed their Kumbaya, We Are the World upbringing to delude them into exporting our Industrial Base to Asia , especially China. Greenspan encouraged this by his currency manipulation before the Stock crash and then ruthlessly used this as tool control the usual Inflationary impact of his post Stock Crash easy money policy., the net effect of which was to destroy domestic manufacturers by allowing Chinese sweat shops to knock off American goods at selling prices less than the cost of raw materials for domestic manufacturers.
Worst of all, he was too slow in dealing with the Housing Bubble so it was well into the exponential explosion before he tried to pop it. When he did finally try to pop the bubble he found he had totally lost control of the US Economy because of his feckless economic policies world wide wiped out his ability to use the Policy Interest Rate and other monetary tools to regulate the economy.
Greenspan was disaster for America and his actions have set the stage for the continued decline of the US Economy that we are now experiencing
As things turned out, Barney Frank won.
I think Greenspan was smart in resigning because, thanks to Congress, there was nothing he could do about Bareny Frank and company.
in greenspan’s interview he now claims that fear drives the market down and must be included in the economic models, but when that happens, confidence in the market’s true value will be manipulated by those who castigate every issue as a crisis; something that is happening today, and greenspan, not recognizing it as an effect of the feds policies and not a cause of market destabilization does not bode well for our economy.
trying to manipulate the market one way or the other will bring bigger financial disasters our way.
teeman