Letters to the Editor
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Greenspan's Gabby Gift
Human beings never learn -- to stop treating Greenspan's utterances like commandments from God -- is right! (Oh wait, we don't even treat commandments from God with such slavish worship.)
Maybe it's irrational of me, but I will forever blame the irrationally exuberant sell-off of tech stocks to Greenspan's unfortunate gift of gab.
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The "Maestro of Greenspeak"
Well, the smug, self-satisfied and now aged gnome - Ayn Rand's foremost disciple - was in high dudgeon last night in his 60 Minutes interview with Lesley Stahl. Insisting he knew not how bad the sub-prime mess would become despite the fact he humped ARMs like crack from a crack dealer, for over a year. And despite the fact, as Stahl pointed out, other Fed governors wanted action to be taken, but faced incessant nays from Sir Allan.
He "didn't see what could be done". Doh!
In truth, it was self-evident that Randism and its idiotic "Objectivist" codswallop had paralyzed his ability to decisely act. Not wanting to be the bad guy regulator he sat on his fat ass (in his bath tub) and did nada while a bad situation got worse.
Same template for the odious Bush tax cuts. Greenie knew damned well that the sleazy $1.35 trillion gimmick (which promised $5.6 TRILLION in surpluses) would hamstring budgets with serious deficits for decades -yet he didn't come out in an EXPLICIT manner (e.g without his obscurantist babble of "Greenspeak") to dismiss them.
Thus, the Bushies rightfully believed he was on their side. The D -weenies wrung their hands as usual, though they did have the votes (in 2001) to halt the cuts in their tracks. Instead, 12 of them punted and gave Bush what he wanted. Leaving future demo-dweeb candidates for the presidency without enough moola to execute even basic plans - or healthcare reforms. Without majorly raising taxes that is.
Even this a.m. in his Matt Lauer interview on NBC Greenie was disingenuous, insisting that he was as clear-spoken on the downsides of the Bush tax cuts - as he shared in his new book. NOT!
He also insisted his 13 consecutive interest rate cuts did not in fact set the stage for the sub-prime debacle by driving the cost of lent money to ridiiculously low levels. The better for mortgage scheisters to peddle ARMS and other crap to the hoi polloi.
What comes across is that Greenspan continues to believe his own bilge and "Greenspeak" and remains incapable of basic honesty. He is a shameless dweezil and Rand zombie as incapable of feeling others' pain from the pseudo- parapets of his overblown wonk intellect, as Bushie boy is from his all hat and no cattle cowboy persona. (A particularly revolting interlude came when he told Lauer with a straight gnomish face that he "hoped something might be done to assuage the angst" of all the people now facing home foreclosures.
Oh, that is so downright generous and charitable of you, Allan. Now go back to your tub and soak your head in it!
After so many years of Greenspan and Greenspeak it is little wonder his successor Bernanke doesn't know whether to shit or go blind - and will likely follow in Greenie's disastrous, misbegotten path with MORE mistakes- by lowering interest rates at least 25 basis pts. tomorrow.
A move that will be like pouring gasoline on a fire, or giving a pound of crack to a bunch of crackheads (on Wall Street) though he will be the last to see it.
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Oh, but you are so wrong...
"treating Greenspan's utterances like commandments from God"
Sure, when he's raising rates during a Dem administration, and telling the Republicans to cut taxes all they want when they get into the White House, but just say "the Iraq war is largely about oil," and watch how suddenly he becomes just an old coot that nobody much listens to. Kinda what happened to Paul O'Neil once he started airing the dirty laundry.
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The media wasn't all in thrall to Alan "Howard Roark" Greenspan
Seriously, though, that's why I read The Economist. They spent a lot of his tenure blaming him for inflating bubbles, etc, and at least airing the possibility that he was storing up trouble for later. I think most in the liberal blogosphere might find the magazine a bit right-leaning (and outspoken) for their taste (and I'd say that Lexington is definitely a conservative voice), but on the whole there is a lot more nuance there than one gets in the US-based press.
Plus of course Greenspan was pushing ARMs--the more people have ARMs, the easier it is for a central bank to control the economy through interest rates. Imagine how much of an impact he could have if whenever he raised rates, everyone's mortgage rate went up...
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??
Sure, if Greenspan started talking about the war for oil a few years ago...that would have worked out well :-))
Why is Leonard still allowed to write for salon? Shouldn't he have his own little unread blog somewhere?
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Why is a book promotion blitz getting the same royal treatment his utterances as Fed chairman received?
Because there are only 100 shopping days left until Christmas (and the "sell by date" for mea culpas/shitting on your former boss is rapidly approaching as well).
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Somewhere
Somewhere in a private moment, with only a confident in earshot or in total seclusion, Fed. Chair Bernanke is probably saying "I wish he would go somewhere and shut the hell up." Though my guess is that he'd use a word or words stronger than "hell."
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Funniest Slogan
At lunch, reading about Greenspan, it occurred to me how hilarious would be his visage accompanied by the slogan: "I'm Alan Greenspan, Bitch!" with his deadpan stare from behind those glasses.
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Greenspan's Mediocrity
Perhaps the chief virtue of a chairman of the Fed is a light touch -- to intervene in monetary policy as infrequently as possible, and without telegraphing what it is you intend to do next. The more the banking industry cruises along the highway of natural market forces without looking over its shoulder and making plans based on what's coming down the line from the Fed, the better.
In this respect Greenspan was a mediocre chairman at best. No matter how he tried, he couldn't ever resist for long the urge to make public pronouncements about the state of the economy, Federal spending priorities, how Americans should conduct their personal financial lives, and so on.
And he drove the prime rate right down to nothing, seriously curtailing the flexibility of the money market in responding to economic trends. Greenspan may have truly been unable to predict that mortgage rates would thereafter go back up (as if they could go anywhere else!), but the banking industry itself clearly showed no such similar myopia.