“an unabashed free-market advocate — in a “state of shocked disbelief.”
...The longtime Fed chief acknowledged under questioning that he had made a “mistake” in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions. Greenspan called it “a flaw in the model that I perceived is the critical functioning structure that defines how the world works.”
...Greenspan told the House Oversight Committee he was wrong in believing that banks would be more prudent in their lending practices because of the need to protect their stockholders.
...But he went on to assign the blame on soaring mortgage foreclosures on overeager investors
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Greenspan is scary. He’s scared that the “free market” acts freely. And he blames everyone, even himself, except the real culprits — the traders and officials at the very institutions that incentivize them with salaries, bonuses and options to inflate and invent weird instruments and increase risk.
I almost have sympathy for him, though. He always was a delusional libertarian cult-of-the-CEO type. But here he sounds actually dimwitted, stupid. It appears he cannot even imagine that the free market acted freely and in this “free” market market actors acted in their self-interest and profited greatly. He has some kind of fantasy abstraction of a “free market” that is not free and works to his imagination, where “distorted markets” are some kind of non-”free” event.
Waxman arguing about no regualation in the mortgage market is a jewel. Article shows that Bush will not follow Bernanke’s idea and force the banks to restructure loans, they will incentivize it with govt. “guarantees,” which only guarantees that banks will do nothing until they see whether they get this, yet another, taxpayer benefit.
He didn’t utter a single syllable implicating Congress.
No mention that guys like Schumer and Conyers were willing to take banks to court for not lending to the poor.
The banks heard, “Do it, or else.” And they did it.
As for the CDS’s, again, nothing. Not a word.
Mr. Andrea Mitchell is a pimp, and holds large responsibility for the mess we are in. Not to mention his testamony undermining the existing administration in Tresury, Reserve, and Banking.
He should hide somewhere and cry a little, because the history books, eventually, are going to hang this one right in his posterior.