Well, he might just as well have said that in this statement:
“The real lesson here appears to be that bank regulators cannot fully or accurately forecast whether…subprime mortgages will turn toxic or whether a…collateralized debt obligation will default, or even if the financial system will seize up,” he said in a speech last week to the Economic Club of New York.
Most of us despise George Bush. But can we please add Alan Greenspan to the list? This was the golden guru we thought was so adept at running our banking system. The one whose every utterance was followed as if a Delphic oracle. Statements like the one above make him out to be an doddering fool. Bank regulators can’t forecast whether the financial system will seize up? Is he kidding? What do we pay them for? To sit and twiddle their thumbs while the economy burns?
And can I ask how many tens of thousands of dollars the Economic Club paid this quack to utter such inanities? The economy tanked on his watch and he’s raking in the bucks in the aftermath while the rest of America suffers the consequences.
How could anyone put any confidence in such a charlatan?
Crimson Ghost says
Right on re: Greenspan.
But Greenspan is only one of a number of Jews at the epicenter of this crisis.
Jews play a hugely disproportionate role at the upper levels of the financial industry — whose recklessness and outright fraud did so much to derail the global economy and plunge the world into a mini depression.
Until recently all members of the Federal Reserve Board of Governors were Jews.
With wealthy right wing Jews the driving force behind the war mongering neo-cons and neo-libs as well the reckless speculative excesses that triggered the current financial and economic collapse — the potential for a revival of REAL anti-semitism is quite pronounced.
If Dershowitz and the ADL continue to scream “anti-semite” at anybody who does not support every Israeli atrocity 100% what will will they do if/when the REAL THING hits them in the face like a hammer.
Miles Stuart says
@Crimson: That Jews have a disproportionate role in sectors like finance is not the product of some grand conspiracy (not that that is what you are suggesting), but because that is where a history of oppression and discrimination has left them. There is also a coagulative effect. Jews tend to be jewelers rather than farmers because when a screaming mob with burning crosses turns up outside your house, it’s easier to escape with a bag of diamonds than with a bag of farm.
@Richard Witty: You’ve got to admit it doesn’t look good. It’s not a great time to be a jewish banker.
Miles, Might I suggest that you read “The Myths of Zionism” by John Rose? Rather than subscribe to the “lacrymose” view of Jewish history, as Jewish historian Salo Baron termed it, Rose’s book is wonderful at giving a good overview of Jewish history. Jewish excellence at trade and banking preceded the occasional religious intolerance Jews faced in medieval Europe. Some of that Jewish predominance can be traced back to religious dictates within Christianity and Islam against usury, which led to bankers, who are primarily lenders, being predominantly Jewish by religion. Looking back in history, religious intolerance against Jews is most often tied up with their role in economics. in good economic times, they prosper. In bad times, Jews, seen primarily as a merchant, trading and banking class, suffered. They didn’t become bankers because they were worried about pogroms. You’ve got it backwards. They suffered pogroms because they were seen as bankers, and were blamed for the bad economic times.
None of this is said to excuse the religious intolerance against Jews, but it is also important to understand history and the origins of intolerance. Bad history helps lead to wide acceptance of Zionism, which is itself a font of religious intolerance (against non-Jews).
Miles Stuart says
Thanks Tree. I think what I wrote is not inconsistent with your much clearer elaboration. I freely confess I am not a great scholar.
My point was really that Jews have not arrived in their present circumstances as, for example, financiers as the result of a conspiracy or a plan, but rather as a consequence of pressures largely beyond their control.
Greenspan got a lot of praise for basically doing nothing to regulate markets and looking on benevolently as a huge bubble built up. While growth continued and share prices continued to rise this all looked good but of course when things started to fall apart the shallow nature of much of this came back to haunt him.
Thing is with regulators is that they earn their money and their spurs not when they tell the market what it wants to hear but when they do the opposite and administer unpopular measures that at the time inflict short-term losses for long-term gains. Greenspan seems to have almost done the exact opposite.
Several regulatory bodies like the BIS (Bank for International Settlements) pointed out more than 2 years ago that an unsustainable monetary bubble was building which could cause a financial collapse. Of course, it wasn’t just Greenspan who was negligent, the SEC unbeleivably didn’t investigate potential frauds like Madoff and Stanford despite receiving complaints and the FSA in the UK was little better in regulating its banks.
Appalling failure by national regulators who took the easy way out and thought the market could regulate itself.
Richard Witty says
The law at the time is what caused the bubble and its bursting and now withering.
Greenspan’s comments in the early 90’s contributed to that deregulatory urge, but he was not a primary cause, more a contributing cause. He made bad judgements. Presidents (Clinton and GW) and Congress (democrats and republicans) made bad structures.
Crimson Ghost is in the fascist category in his Ezra Poundish description of “Jews at the epicenter”.
Nobody is accusing Greenspan of causing the bubble; but the fact remains that he completely ignored it, and followed policies that were detrimental to the long-term health of the financial sector all the while being hailed as some sort of economic wizard.
Problems with the unregulated financial structures were hardly unknown, in the 1990s. In the wake of the Asian 1997 financial crisis, several mainstream economists like Krugman and Stiglitz and Dani Rodrik criticised US monetary policy. Domestically Robert Reich, Mark Pollit and several others pointed to the costs in terms of reduced employment and lower wages that these policies were inflicting but they were ignored.
Despite the fiasco of the hedge funds in several scams during the late 1990s, the experience of Russia and Malaysia and the LCTM disaester; people like Greenspan took no corrective measures.
Central bankers will always be under pressure from politicians but because they are not elected and have a mandate to regulate the financial system; they should be able to maintain a degree of independence from the political establishment and insulate themselves from these pressures. The best central bankers like Volcker, can do this and were hardly popular because of it.
Miles Stuart says
The economic mess has been greatly exacerbated by competitive deregulation between London and New York, and our political masters treating the market as a religion rather than a servant. The fault is not with regulators, but with the politicians who circumscribed them.
Histories four most expensive words are “It’s different this time”.
Crimson Ghost says
Speaking as a Norman Finklelstein type Jew I say without equivocation that wealthy Zionist Jews have too much power in America for the nation’s good or their own good for that matter.
I have no more in common with the mainstream jewish leadership (most of who supported the brutal Gaza pogrom) than White Rose resisters had with Hitler.
I am a firm believer in the old adage “if you give them enough rope they will hang themselves”.
I fervently hope (but do not really expect) that the mainstream Jewish community will pull back from the brink of dual loyalty and warmongering before it is too late for all of us.
I am a firm believer in the old adage “if you give them enough rope they will hang themselves>’
In one sense it is wrong to single Greenspan out. “We’re making it up as we go along” was the Bush Administration’s modus operandi pretty much across the board, wasn’t it?
What Greenspan should be held accountable for is his two-faced actions and reactions. The contrast between his actions and statements during the Clinton Administration, when he constantly warned about “irrational exuberance” and deficit spending and pushed for higher interest rates, and his total reversal during Bush, when suddenly high deficit spending was not a problem, and no housing bubble was too big to be warned against, much less toned down or responsibly managed.
He proved himself to be a partisan hack.
thanks Tree, for bringing that issue up…I clearly remember feeling puzzled at Greenspan’s harping during 1999 about needing to “put the brakes on’…and slow down our overheated economy during the end of that administration…and I sensed that something else was being played…screech the brakes on…ahead of the incoming administration…and during early bush years his referring to what he needed to do to cool things down. I thought he was being disingenuous at best and manipulative at worst..I did not know what his sudden found protectionist efforts were about but sensed something strange was going on….but I do remember wondering at his sudden expressions of needing to cool things down.
To be fair, though to Greenspan, he did little to burst the bubble even during the Clinton era and resisted any moves to regulate financial instruments like derivatives, hedge funds and long term currency trades anymore rigorously. HE went along with Clinton’s repeal of the Glass-Steagull act and other such initatives.
There was also concern by 1999/2000 about the tech bubble which had burst and low interest rates were seen as a way of shielding the corporate economy from this fallout of this and the 2001 attacks reinforced this trend. Greenspan’s real errors lie earlier in the decade when he should have prevented the bubble from growing so rapidly and not deregulated the financial sector to aggravate the imbalances within the US economy.
I recently learned, to my amazement, that Alan Greenspan was an excellent jazz saxophonist, studied at Juillard but quit to tour with the well-known Harry Jerome swing orchestra in 1944. What a shame he did not stay in the music business.