Greenspan: "I Suck"
That essentially was Easy Al's testimony:
Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami'' has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.
"Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. "That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.''
Greenspan said he was ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.
"We cannot expect perfection in any area where forecasting is required,'' he said. "We have to do our best but not expect infallibility or omniscience.''
Part of the problem was that the Fed's ability to forecast the economy's trajectory is an inexact science, he said.
"If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. "Forecasting never gets to the point where it is 100 percent accurate.''
Discuss amongst your selves -- Greenspan: Bad FOMC Chair, or the Worst FOMC chair?
Source:
Greenspan Concedes to `Flaw' in His Market Ideology
Scott Lanman and Steve Matthews
Bloomberg, Oct. 23 2008
http://www.bloomberg.com/apps/news?pid=20601087&refer=&sid=ah5qh9Up4rIg
Thursday, October 23, 2008 | 02:30 PM | Permalink
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Well, if you ask that "free market" ideologue fraud Stephen Moore, he would say that Greenie is the best Fed Chairman we've ever had (not sure that says much, however)......
What do I say? I would say the jury's still out but if this market/economy truly falls apart like I think it could, I would say he's the worst ever, by far.
Posted by: Jeff M. | Oct 23, 2008 2:33:04 PM
But, but... I trusted them to do the right thing
Posted by: Pete | Oct 23, 2008 2:34:23 PM
But, but... I trusted them to do the right thing
Posted by: Pete | Oct 23, 2008 2:36:23 PM
I've been operating under the assumption that Greenspan did what he did intentionally, knowing that things would unfold as they are now.
Much of what he said in his testimony, interpreted precisely, was trivial and tautological. It's just the spin people (the press) puts on it that makes it sound so atrocious.
Until I'm convinced otherwise, operating with the values that the existence of the Fed is a bad thing, I'm of the opinion that ne's not a bad FOMC chairman, nor the worst, but the best!
Posted by: J Coin | Oct 23, 2008 2:36:36 PM
there is a difference between wrong and rotten. i think Al's policy decisions turned out to be very wrong, but i don't think he's rotten (by rotten i mean: knowingly pursued path that would lead to current financial crisis just because he wanted to for fun or make some $ off it).
Posted by: the man from Nantucket | Oct 23, 2008 2:42:42 PM
Ayn Rand's preeminent real-world adherent recants. Objectivism, soiled, enters the dust bin of history.
You need people, working together, who know the rules, and that those rules are fair and enforced, which is the opposite of Objectivism and is necessary for Capitalism.
Posted by: VennData | Oct 23, 2008 2:43:28 PM
And I used to think he was the best... surely he can't be the worst, think about the 70s, they didn't get anything right,not even inflation
so chalk him up as a very bad Fed Chair
Posted by: Michael Donnelly | Oct 23, 2008 2:43:31 PM
Finally at age 82 finally loses innocence. About 60 years too late.
Posted by: tyaresun | Oct 23, 2008 2:44:33 PM
"Greenspan: I Suck". Ha! That is your best blog post title ever, Barry. Sums it up in 3 words.
Greenspan managed to preside over two of the largest bubbles in the history of mankind. That's hard to do. Would the bubbles still have happened without the easy money unleashed by Al? Yeah probably, but not nearly as bad. Al made it special for the whole world.
Posted by: JD | Oct 23, 2008 2:46:21 PM
J Coin, is on to something, Ol' Easy Al did us a tremendous favor--he operated the FedRes in such a way that it became obvious, to even the most blinkered, that 'Central Banking' has severe limits, at best, is a Wholesale Fraud, in *Reality, that will leave You 'Holding the Bag'.
We owe Greenspan a debt of Gratitude. The FedRes should pack up their Notes and go Home. As well, if they'd, kindly, leave a forwarding address, I'm sure they have some Creditors that would like to speak them..
Posted by: Mark E Hoffer | Oct 23, 2008 2:47:57 PM
I think he borrowed a shitload of yen and invested it in the US stock market.
Posted by: I-Man | Oct 23, 2008 2:49:04 PM
I still don't understand why, over the past several years, all these imbiciles in the media proclaimed Greenspan to be this genius, because he spoke in puns, "sounded" intelligent, always spoke evasively, and all he was and still is, is a geriatric babbler who reads a lot of books.
He was wrong, all along. And now, everyone is blaming this mess on him.
Where were these idiots 10 years ago when they were blowing smoke up his geriatric arse????
Posted by: Craig | Oct 23, 2008 2:49:05 PM
Surely Benjamin Strong deserves at least honourable mention. He arguably established the notion of the fed as a moderator of the business cycle and the use of inflation as a means of promoting stability.
Posted by: Estragon | Oct 23, 2008 2:51:24 PM
I am a committed ageist, I think that no one [even Buffett his own self] should be running a big company past the age of 70. The judgment just goes awry--and in this case, Easy Al believed his own clippings. How's that Maestro book selling?
So having Greenspan run the Fed into his 80's was just suicidal. If he had quit in 1998, he would have legitimately done a good job.
Posted by: Jay Weinstein | Oct 23, 2008 2:53:16 PM
Creditz - I has them !
Posted by: attilahooper | Oct 23, 2008 2:55:01 PM
Let's not try to blame this a long dead philosopher(Any Rand). However wrong she was, it was congress who pressured Greenspan to inflate bubbles and the media cheered him on.
Greenspan is just a political opportunist. He probably knew the bubble would burst eventually.
Posted by: Anders Aronsson | Oct 23, 2008 2:56:02 PM
Current testimony aside, why do so many MSM outlets continue to quote him ?
On a separate note...since electronic voting has proven successful for such trivial things as American Idol, why can't we employ the same 'platform' instead of having elected officials who seem to have compromised motives at every turn ? I wish I could find the email I was sent a month ago but suffice to say the financial services industry spent oodles of $$ lobbying for the loose regulations that allowed them to hang themselves.
Posted by: Jeremy | Oct 23, 2008 2:59:53 PM
On Amazon.com, there are lots of people selling copies of Bob Woodward’s book “Maestro: Greenspan’s Fed and the American Boom” available for just one penny (+ $3.99 shipping and handling).
If anyone’s interested.
Posted by: DL | Oct 23, 2008 3:01:11 PM
If the potential exists for mixing politics with fractional reserve, fiat money, central banking, Mr Greenspan, it ain't a 'free' market.
Posted by: loan shark | Oct 23, 2008 3:03:35 PM
If Greenspan was just a political opportunist, and he probably knew the bubble would burst eventually. Do you think he wanted it to happen after he was dead... or before.
Me thinks that Greenspan, Bush, Cheney, Pelosi, and a few others Wall Street execs, should be put into glass boxes in the Washington Mall so we can see what happens to people in a democracy that's gone wild... and became totally irresponsible to the voters.
Posted by: Mattie | Oct 23, 2008 3:12:40 PM
Mr. Greenspan said there should be more regulation of credit default swaps. More? Going from ZERO regulation to ANY regulation is an infinite increase...
Posted by: kurt milne | Oct 23, 2008 3:14:22 PM
Oh and next comes the discredit of the fiat money system. I know when a gift has been presented to me - I'm buying gold and silver all the way down!
Posted by: ConcernedCitizen | Oct 23, 2008 3:16:39 PM
My Econ Class is realllly really interesting this year....
I am rethinking the topic of my paper. Perhaps I should call it "Epic Fail: The policies of Alan Greenspan"
I'm serious.
Posted by: TheHolyFatman | Oct 23, 2008 3:17:34 PM
I like your headline much better than mine!
Posted by: Madame X | Oct 23, 2008 3:19:11 PM
Dear Mr. Greenspan,
A Tsunami is a natural event. What we have here was caused by human malfeasance. No, you did not have the best of intentions. No, you did not have any intentions except to make sure the derivative pyramid that your chronies ran was well funded. Since you show no repentance, we can assume you accept no responsibility and willingness to make restitution. Therefore, we the people, have one question to ask you? What is your net worth? For every percentile that it grew during the bubble you facilitated, you will have to donate that amount in US dollars to homeless shelters. In addition, your social security monthly income will be sent to a national 401K rescue fund. Have a nice day.
Posted by: AGG | Oct 23, 2008 3:20:52 PM
