The Lies of Alan Greenspan

I can't believe that U.S. taxpayers (an increasingly smaller and smaller demographic) are not jumping up and down and screaming their voices hoarse over yesterday's public bailout of Freddie Mac and Fannie Mae. My disbelief is not because I think it will do much (if anything) to change the outcome (which has obligated the middle- and lower-class taxpayers at the bottom of the U.S. wealth pyramid to pay off the debts incurred by the largely non-taxpaying wealthy at the top of the pyramid), but mainly because the debt is so huge, so long lasting and so totally unknown to the vast majority of those who will immediately begin paying it off with their next paycheck (so that the markets can continue creating opportunities for those at the top to find another scheme in the future anywhere near so successful). After all (give them their due), it's not everyday that a little financial chicanery can make so many billionaires out of mere millionaires. My attention (as an economist) is also engaged because this new taxpayer debt dwarfs the taxpayer contribution needed by the Keating Five's Savings and Loan fiasco beginning in the 80's, which prior to this time was the largest taxpayer bailout arising from politician-facilitated treasury extortion (compliments of John McCain and his cronies (which included Alan Greenspan, someone who should have known better than to roll the dice putting the future wealth of this nation at peril), who are once again hungrily eyeing even greater positions of power and opportunities for enrichment). When Bill Greider (The Nation’s national affairs correspondent, who has been a political journalist for more than 35 years and a former Rolling Stone and Washington Post editor) in the following essay states (somewhat drolly) "He (Alan Greenspan) can see the conservative era he celebrated and helped to impose upon the American economy is in utter ruin," I can say with some assurance that if you watch the MSM you get no such message. I don't see any economic reporting of consequence, except the news that comes out of nowhere every few days that another bank or financial institution is going under if they don't also get an immediate shot of taxpayer funds (which supposedly will save them and the whole economy (at least this week) if you can continue to believe the shocked tones of the youngsters reading the new news). (Emphasis marks and some editing are mine.) ________________________________________________

The Lies of Alan Greenspan William Greider The Nation via San Francisco Chronicle (Posted by oikonomikablog) Tuesday, September 18, 2007 Alan Greenspan has come back from the tomb of history to correct the record. He did not make any mistakes in his 18-year tenure as Federal Reserve chairman. He did not endorse the regressive Bush tax cuts of 2001 that pumped up the federal deficits and aggravated inequalities. He did not cause the housing bubble that is now in collapse. He did not ignore the stock market bubble that subsequently melted away and cost investors $6 trillion. He did not say the Iraq war is “largely about oil.” Check the record. These are all lies. Greenspan’s testimony endorsing the Bush tax cuts was extremely influential but now he wants to run away from it. In the instance of Iraq, Greenspan is actually correcting his own memoir, The Age of Turbulence, which just came out. Last weekend, newspapers reported provocative snippets from the book, including this: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” Wow, talk about your “inconvenient truth.” Greenspan was blithely acknowledging what official Washington has always denied and the news media faithfully ignored. “Blood for oil.” No, no, no, that’s not what he meant, Greenspan corrected in a follow-up interview (with Bob Woodward in the Sept. 17 Washington Post). He was only saying that “taking out Saddam was essential” for “oil security” and the global economy. Are you confused? Welcome to the world of slippery truth that Greenspan has always lived in. He was the Maestro, as Woodward’s loving portrait dubbed him. Wall Street loved the chairman best because the traders and bankers knew he was always on their side and would come to their rescue. The major news media treated him like an Old Testament prophet. Whatever the chairman said was carved on stone tablets, even when it didn’t make any sense, as it often didn’t.[Ed's note: Most of it due to the Ayn Randian-neoCon pervasive influence.] Some of us, who followed his tracks more closely, were not so kind. Harry Reid, now the Democratic Senate leader, said Greenspan was “one of the biggest political hacks in Washington.” Amen. I called him “the one-eyed chairman” who could always spot reasons to stomp on the real economy of work and production, but was utterly blind to the destructive chaos in the financial system. No matter. The adoration of him was nearly universal. Until now. The economic consequences of his rule are accumulating, and even the dullest financial reporters are stumbling on crumbs of truth about Greenspan’s legendary reign. It sowed profound and dangerous imbalances in the U.S. economy. That’s what happens when government power tips the balance in favor of capital over labor, favoring super-rich over middle class and poor, then holds it there for nearly a generation. Things get out of whack and now the country is paying enormously. A pity reporters and politicians didn’t have the nerve to ask these questions when Greenspan was in power. [Ed's note: And don't forget his wife, Andrea Mitchell (Greenspan) who is still running around PBS with her astute comments about the economic woes of the lower classes. I guess she feels our pain from personal experience.] He retired only a year ago, but is already trying to revise the history — to explain away blunders that are now a financial crisis facing his successor; to rearrange the facts in exculpatory ways; to deny his right-wing ideological bias and his raw partisanship in behalf of the Bush Republicans. The man is shrewd. He can see the conservative era he celebrated and helped to impose upon the American economy is in utter ruin. He is trying to get some distance from it before the blood splashes all over his reputation. Of course, he also came back to cash in — an $8 million advance for a book that is sure to be a huge best-seller. I don’t want to be unkind, but Greenspan could have avoided all the embarrassing questions if his book was posthumous. I haven’t read it yet. I have a hunch I am not going to like it. William Greider is the author of One World, Ready or Not, Secrets of the Temple, Who Will Tell The People?, and, most recently, The Soul of Capitalism (Simon & Schuster).

________________________________________________ Just saying. Suzan