Alan Greenspan GreedScam
By Barry Ritholtz - September 23rd, 2010, 2:00PM
Mortgage Rates goes a bit postal on Greenspan, calling him Alan GreedScam in an ad hominem infographic frenzy.
I think thats harsh, as Greenspan was merely wildly wrong, motivated perhaps by pride (accolades used to poured upon him), but perversely, not money.
Regardless, he is today’s infographic porn:
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click or ginormous graphic
Hat tip Reformed Broker
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September 23rd, 2010 at 2:42 pm
And Bernanke is not keeping rates low for an indefinite period now. It’s very ironic that some of the same people attacking Greenspan are supportive of Q.E. (which incidentally is really hurting people on fixed incomes and creating all sorts of distortions in our markets that we have yet to deal with arising from present value and investment decisions/assumptions using near zero percent rates.
September 23rd, 2010 at 2:55 pm
“I think that’s harsh, as Greenspan was merely wildly wrong, motivated perhaps by pride (accolades used to poured upon him), but perversely, not money.”
Sorry but I’m not buying. I don’t doubt that Greedscam was 100% convinced of doing the right thing but that’s no excuse for anything, given that 1) his ‘honest mistakes’ ended up profiting his good friends, particularly, his willful inaction on mortgage scams (and, once out of the Fed, he certainly rushed to cash out for himself) and 2), anyone can rationalize whatever one is doing, no matter how criminal, given enough bad faith, so whatever Greedscam believed has no bearing on his culpatibility.
Greedscam was a con artist working for con artists at the country’s expense. I would really love to see him and many other bansters tried, convicted and hanged.
September 23rd, 2010 at 3:14 pm
Greenspan was not motivated by greed. He was motivated an ideology based on flawed and incomplete premises regarding human behavior in complex settings. This ideology has many adherents on this site, though obviously not the host. Sadly, given the epistemic closure on the right, the last three years will change none of the minds of these acolytes. In truth, I doubt Uncle Alan has really formulated a different perspective of financial markets.
September 23rd, 2010 at 3:15 pm
I have come to think that we as a nation made several overreactions to the terrorist attacks of 9/11.
The “too low for too long” by Alan Greenspan can also be explained as an overreaction to the uncertainty that followed the 9/11. We all know about other policy missteps but I am still surprised that no one has put forward this thesis that even Fed’s policy was an overreaction to 9/11.
In a way, I think it is only natural to have an extraordinary reaction to an attack like that as it was a generational event. Biggest attack on homeland since WW II. So expectation of completely rational response is not fair, and I think thats what happened. I am just surprised that this point hasnt come up.
September 23rd, 2010 at 3:16 pm
This is NOT postal. This is VERY REAL for millions of Americans (the large silent minority) that have to pay for the negligence of others including Greenspan. In case you missed it, Greenspan put country’s borders (cuts in defense budget) at risk by completely ignoring housing and mortgages issues, expedited the largest transfer of wealth in history (haves and have nots), and encouraged criminal fraud (call it aid and abet Bernie) by declaring that bubbles should neither be identified nor checked. Anyone notice that financial crimes usually rise with financial bubbles? Yet Greenspan wonders the streets and sells books and Obama simply says “oh, there is too much blame to go around so lets move on.” You want trust in banking? prosecute this criminal or at least pretend to try.
September 23rd, 2010 at 3:33 pm
Yea, I agree Greenspan was largely driven by ideology but keep in mind that the Fed Chairman is not as independent as the Fed maintains. Not since Volcker have we really had an independent Fed chairman.
September 23rd, 2010 at 3:43 pm
Independent of what? Of party? Of presidency? Of ideology? Greenspan followed in the footsteps of his mentor, Arthur Burns, who was a great economist (of his day), but as a dyed-in-the-wool Republican was, as Fed Chairman, prepared to do anything necessary to assist the re-election efforts of Richard Nixon. Arguably, Burns laid the foundation for the inflation of the 1970′s. The only substantive difference between Burns and Greenspan is that Burns was a great economist (of his day), while Greenspan was and is neither.
September 23rd, 2010 at 3:49 pm
I really hate scapegoating and I always find it fascinating how the “revisionists” try to rewrite history using twenty 20/20 hind sight…in the case of “the Maestro”….as I recall during his reign very few “financial experts” stepped out to criticize him when the economy was booming…in fact the majority of the folks loved him as they all went along for the ride…every Humphrey Hawkins was a love fest…And what a ride we all had…now that the wheels have fallen off, some of the blame can certainly be laid at his feet…but not the majority of it…no for that other DC policy makers must share the blame….and so do the banks…and Wall St…and the mortgage brokers and last but not least…the consumer…
September 23rd, 2010 at 4:10 pm
either Fed is independent (like Greenspan and the law says it is) or not independent (in which case you prosecute). Either way, Greenspan deceived and was extraordinarily irresponsible (there was a flaw? are you kidding me?) .
September 23rd, 2010 at 4:49 pm
not sure how the Fed is really hurting those on fixed incomes. there is no demand for loans from any body (business has no need for it as there is demand, and consumers aren’t interested in loans either) so that leaves who to drive the need for a loan? even if the FED stopped their easy loan machine (which i thought they did) then there would still be no interest. banks don’t work they way they used.
September 23rd, 2010 at 5:40 pm
You really think this guy acted alone out of his devotion to Ayn Rand?
http://www.youtube.com/watch?v=e8r-YD3FdlE&feature=related
September 23rd, 2010 at 5:43 pm
Where the Democrat’s stand.
The democratic party should stand for “sustainable markets”. Markets that cannot self destruct, markets that don’t defraud the players.
But, with US elections funded by the super-rich-crack-pot-fringe: Koch brothers, how do we get that to happen?
September 23rd, 2010 at 5:45 pm
Correct me if I’m wrong.
But, wasn’t Greenspan’s philosophy: Business Fraud will fix itself? Did that work out?
September 23rd, 2010 at 6:09 pm
How to be a central banker: Talk arrogantly, and lower interest rates.
September 23rd, 2010 at 6:12 pm
@Jim,
the market keeps trying to correct itself, with LTCM to the tech bubble to the current banking/credit crisis, but the government (FED) keeps trying to prevent any pain whatsoever and compounds the problem. Notice the bubbles, and crashes are getting bigger and uglier.
Dollar collapse is end game.
September 23rd, 2010 at 6:14 pm
@PDS, there were plenty of critics complaining of easy money when Allen was being a fool, you were looking at the wrong places, or not seeking them out. They get brushed off as ‘crazies’, like Ron Paul and gold owners.
September 23rd, 2010 at 6:44 pm
I doubt any punishment today could be worse than his having spent time with Ayn Rand back when.
September 24th, 2010 at 7:34 am
TripleSigma…..Greenspan was Fed Chairman from 1987 to 2006…Ron Paul and the rest of the hair shirts didn’t show up meaningfully on the Greenspan critique radar until the mid 2000′s..really not until after Greenspan had left the stage….the point is that there is lots of blame to be shared by many in helping to create the is chronic mess we are in…Greenspan was one policy maker who had his finger in it…there are many others…eg lets start with some that are still in office….like Barney Frank!
September 25th, 2010 at 6:57 am
Greenspan was horribly wrong. That said, the cult of the individual in this country loves to bestow on the head of any organization larger than life status. Guys like Bob Woodward put an exclamation point on the individual.
Greenspan was a bagman, a very senior bagman I grant you, but a bagman nevertheless for Wall Street and the concentration of wealth in the United States. The mass media pepetuate this cult and, not surprisingly, many of these cult like figures marry younger media personalities, as did Greenspan.