Prof Michael Hudson discusses Greenspan’s reputation in his formative days on Wall St.
Transcript after the jump
Prof Michael Hudson discusses Greenspan’s reputation in his formative days on Wall St.
This is the transcript of an interview with Michael Hudson, discussing a 1966 incident:
MH: They increased [relative taxes on labor] largely by having Alan Greenspan create the Greenspan Commission to look at social security and pushing the myth that social security had to be funded out of pre savings, so American labour was essentially taxed 11% between itself and the employers to pay social security and this vast increase in social security taxes was used to lend to the Government(US) to provide it with enough money to slash taxes on the rich and that was Greenspan’s ploy.
He was rewarded by being made head of the Federal Reserve for his actual hatred of labour and his desire that you had to reduce living standards in order to increase the profits of capital.
And so Greenspan was sort of the hack that was hired.
When I was on Wall Street, Greenspan was hired as part of a study I was doing on the balance of payments of the Oil Industry. And one day my boss, John Deaver came into my office and said he really worried about Greenspan being a part of this report because he was known as a hack that always gave …his clients what they wanted instead of something actual.
So he (JD) gave me Greenspan’s figures on depreciation of oil producing refinery assets in Europe and asked me to find out where the faking is? He said he couldn’t believe that Greenspan by himself wouldn’t of just faked the figures and it took me about a week to figure out where the faking of the figures came out (from) and that was Greenspan had simply picked up depreciation rates relative to output for the United States and projected them onto Europe.
So I went over and talked to his assistant Lucille Woo and she said “it’s all implicit, all implicit” and I confronted her with it and she said “Yes that’s what we did”!
And so, Greenspan was indeed ‘talked off the study’ and we met… John Deaver, David Rockefeller and myself and I was told…Greenspan was such a little bastard that if they fired him, he’d hold a grudge against Chase Manhattan for years and they told me to be the guy to give him the news that we couldn’t use his (laughs) statistics on it and I was a 25 year old economist at the time and he hardly new me at all, so I was the guy that…subsequently became known as ‘the man who fired Alan Greenspan’.”
Fred Sheehan
www.AuContrarian.com
Category: Federal Reserve, Video
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Can you imagine how much more money you would have had if Reagan had not been elected? Unless of course, you didn’t work for a living
All you GOP suckers who think Reagan was good for this country our there, it’s time to get all angry and into your version of the data-ignore mode.
@VennData
Hi Venn,
As a republican I will address Venndata’s premise, a worthy one. Would you be better off today if Reagan was immortal and continued running the country until now? Your question was obtuse but a challenge to the economic performance of the Reagan Administration, so I took up the question (in Data Mode).
Below is average GDP change during the terms of U.S. Presidents since Truman (let’s take out the Great Depression, WWII, Korean War, and everything before). These are approximate changes for modern times calculated in 2008 dollars, using probably reliable data from several internet sources.
Eisenhower, 4.8%
Kennedy, 5.5%
Johnson, 8.1%
Nixon, 8.8%
Ford, 10.1%
Carter, 11.4%
Reagan, 7.8%
Bush, 5.5%
Clinton, 5.5%
Bush, 3.9%
Obama, 0.8%
There have been six Democrat and six Republican Presidents since Truman. Reagan had about a 7.8% GDP average rise per year in his two terms, but the overall average since Reagan is 3.9%. So the simplistic answer to your premise, is –
“I would have about twice the money today with Reagan replacing the last four Presidents.”
The bigger observation is that GDP overall was increasing until about 1980, Carter’s term in office, when the 30 year trend (GDP up), reversed and since then has gone steadily down. I took constant dollar GDP change since Truman, and applied linear computer-generated trend lines. About 1980 the erosion in increasing GDP change started, reversing from an upward trend to a downward trend. And as you can see above, it has been down, down, down since 1980. Oh to have Ford and Carter’s GDPs back again!
Rather than blame Presidents for these outcomes, there is a bigger picture (no pun intended). After World War II the major powers were bombed out, their economies were flattened. By 1980 they had rebuilt and were back to strong economic form, the strongest being Germany and Japan. Also Japan and Germany were not allowed to go on expeditionary wars or even build sizable military industrial complexes. I would argue an obvious tie between building commerce and avoiding military spending, as a way to build economic strength.
Now we have developing nations that are developed, and they provide even more economic competition (the BRICKS). Will President Hillary (2017 – 2020) have an average GDP of -8% during her four years in office? That’s where the trend line is headed!
The problem with our Presidents, political parties, yes and even ourselves, is that we are not ready to reign in military waste (Vietnam, Iraq, Kuwait, etc., etc.), and start to compete globally. We need to produce valuable international goods and services, instead of waging war and making new and fancier war toys. Until we do this, the downward trend will continue, a very ugly trend.
Sorry Barry, that is a Big Picture. (Pun intended)
Marcus nice work & diagnosis .. but ClintonII and -8% ? powers will not let that happen (imo) a 6Mil Dollar man moment “we can build it better – better than before” … course the ag belt must not be obliterated
but generally GDP is just cash churn and the FIRE & media economy is big there .. our world trade deficit is imo a more true measure of our antiGDP … be remiss to not add, seems the system has that checked / except remissX2, the real loss is in job losses and that accompanying education baton pass … can we live in green green grass of home and let production happen elsewhere ? ummm ?
@Greg0658
Hi Grego,
Yep. Realizing a problem is only step one. What to do about it is the real issue.
Our challenge will be putting 300 million Americans to work doing meaningful tasks. I have not reviewed the relationship of trade deficits to macroeconomic moves, but we fully agree on the strengths that support our economy even when major trends go against us.
The U.S. still has its AG sector (North America being the largest food producing area of the world), so we can eat and we will continue to sell calorific value abroad. We may be able to export natural resources (coal, processed crude oil, natural gas-derived products, recycled materials like paper/Al/Fe, etc.). Several countries do well with this model (Canada, Chile).
What we probably can’t do is combine capital with untrained, uneducated labor, and compete in the international manufacturing/industrial sector. We can compete in the IP sector; design, research, prototype, if we invest in high tech training (more MITs, CalPolys, Georgia Techs), and their supporting infrastructure.
I hope our GDP is not -8% in the next decade. But that’s where the trend line is going.