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Posted on 10/20/2013 3:38:49 AM PDT by lbryce
Complete Title:Alan Greenspan: What Went Wrong The Former Fed chairman on Where the Economy Went Wrong, Where He Went wrong—and Ayn Rand.
Alan Greenspan, the former chairman of the Federal Reserve, goes to a lot of parties. He and his wife, the TV journalist Andrea Mitchell, "sort of get invited everywhere," he says, sitting in front of the long bay window in his office on Connecticut Avenue in Washington, D.C. Lately, though, cocktails and dinners seem to have guest lists drawn almost exclusively from one political party or the other. "It used to be a ritualistic 50-50 at parties—the doyennes of culture and partying were very strict about bipartisanship," he adds. "That doesn't exist anymore."
In his new book "The Map and the Territory," to be released on Tuesday, Mr. Greenspan, 87, goes on a hunt for what has gone wrong in American politics and in the U.S. economy.
He doesn't blame the current administration for today's partisan divide. The culprit? "It's the benefits," he says, pointing to the disagreements between Republicans and Democrats over how to deal with the growth of entitlements. In the book, he also ponders why the Fed failed to predict the financial crisis, where he himself went wrong and how that discovery has completely changed his worldview.
(Excerpt) Read more at online.wsj.com ...
Zero blame on the Banks and their Real-Estate assessor toadies.
Greenie is showing himself to be yet another bank-crack licker.
Now I don’t blame it entirely on the banks - the benefits and the easy money have alot to do with it also.
You don’t have to work so hard if you have tons of bennies.
And why save to buy something in the future when easy money policies allow you to borrow and get what you want today?
There’s more than enough blame to go around.
But no doubt Congress, who has a RESPONSIBILITY to “coin money and regulate the value thereof”, has miserably failed, almost to a treasonous level!
Exactly. When looking at the models and making decisions, he should have been asking himself, “If this is the model, how can people take unfair advantage of it? How much damage can they do? How can we avoid it?”
He said in the article that fear about the economy has more influence upon it than euphoria. That makes sense. Fearful people either horde their wealth as if their lives depended on it or spend it as if there were no tomorrow. Euphoric people invest and spend and may even keep a reserve.
An earlier poster suggested that when a person is in a role or position for a long time, the person and the role become one thing: they are an institution unto themselves. That makes sense to me, too. If the captains and pundits turned to Greenspan and saw he was not shaking, they drew their confidence about the future of the economy from him—whether it was warranted or not. But the upside is that it can work for awhile.
It’s funny, too. Greenspan gives full credit to Rand that you cannot rely on models that do not account for genuine human behavior—especially irrational behavior. People don’t have economic models and forecasts in their hands when making a decision about their own money. Economics is hardly a concern when they make the tiny decisions that, when taken as a sum, become big decisions that producers and consumers make about the future of the economy.
Too late, he understood that easy credit makes for easy spending. And in a society where the information bar of the average citizen becomes progressively lower and lower, the one big thing they understand is that money is being extended to them, so why save? Spend it! And so we have debt and liabilities for decades into the future measured in the trillions.
Rush talks about it often. He recently said that in many ways, people never mature beyond high school and that most people reach a point in their lives where they settle and the social fabric begins to mirror one that you might find in high school. That is, the problem is that people simply want to be liked and often compromise themselves in the hopes of being liked and being part of the club.
If you’re the decision-maker and an enterprise hinges by your decision and it alone, logical and rational choices are tough decisions, but easier to make than if you’re part of a decision-making process that requires input from a group. Now the illogical and irrational enters into the equation and you have to either persuade people to your way of thinking with logic and arguments (tougher still) or compromise the decision-making so that everyone remains “friends”, gets along, and the blame and rewards are shared.
Too, when you’re young, you’re usually not given the opportunity to make independent decisions. Or the ones you can make only affect yourself. Easier to be an Bbjectivist then. Then you start making a wider circle of friends, co-workers, family. Very, very tough to be an Objectivist (especially a declared one) when everyone else has their own ideas and ways about doing things. And then the peer pressure hits and you’re in high school again...
“You wanna be one of the cool kids, doncha?”
He certainly didn't. Rand based her economic philosophy on Ludwig Von Mises's Austrian School. Greenspan acts as if he's never heard of it -- and probably hasn't.
It's amazing to me just how incurious some people are. Yet they gain tremendous power and wealth.
“I never bought into her Objectivist philosophy, but her insights into and portrayal of the grubbing nature of moochers and politicians is dead on and timeless.”
Same here. Randists are annoying little dogmatists, who never bother to question a premise, so long as it’s Rand’s. In the middle of Fountainhead, I just put the book down and never looked at it again, though I did endure Atlas Shrugged and Anthem (ok. We, The Living was pretty good). But did she ever sock it to the pomos, psuedo-intellectuals and power-mongers!
God's quiet, persistent voice in our ears. Once a person is finally all alone in the dark with nothing but objectivism to hold on to they usually realize something big and important is missing from their lives.
Alan Greenspan destroys America by urging more home owners take out adjustable rate mortgages...and then hiking those rates by 4.5% in the next 6 months. Thanks Alan!
He’s right. The entitlements and benefits are the main cause of the outrageous pile of debt, and prostitutes who’ve sold themselves portions of it won’t like that kind of statement from any man.
He’s right. The entitlements and benefits are the main cause of the outrageous pile of debt, and prostitutes who’ve sold themselves for portions of it won’t like that kind of statement from any man.
[I forgot the word, for. It’s a necessary word.]
I certainly agree. I think I'm just trying to remember that Man is not the measure of all things. Man-exalting world views are fundamentally flawed and result in folly.
I remember Isaac Asimov’s science fiction series called the Foundation Trilogy in which a mathematician was able to place a value on every human factor to enable him to predict the future history of the human race.
I think Greenspan thinks he was Harry Selden, the mathematician in the series. A great book, based on an impossible premise...a Great United States Economy, based also on false premises...
Neither accurately reflect the capacity of people to become dependent upon handouts.
I think we Americans, are tamed wolves, formerly able to eat what we kill, and now only capable of waiting for the zoo-keeper to fill our bowls.
Indeed. Psychohistory. I don’t think Greenspan knows it was just a sci fi novel. It’s Asimov, and a true classic, but still FICTION!
can we call a spade a spade. does anyone really think that greenspan(and by the way, he’s married to andrea Mitchell, one of the most Marxist journalist there is) really could care about the Christian middle class in this country, or was his job to transfer wealth to new York and away from the heartland.
and why would it be so hard for anyone to not believe it?
Most truthful post I’ve read in quite a while.
The people at the founding and first 100 years were different from us. Their faith, their character, and their knowledge of scripture made them very, very different from 99% of today’s American’s. America really cannot function with the level of foolishness, lack of self discipline, lack of faith and lack of grounding in scripture - cartoonishness as you call it is a good description.
I just read it. It's there.
Yup, he caught the wave of Baby Boomers who suddenly woke up to the fact that they were in their 40’s and 50s and had squandered their incomes on toys and fun and had accumulated little to no retirement funds, and needed to build up an investment portfolio overnight.
Just like all the Baby Boom fads, the simultaneous, large collective swing to investing by the huge Baby Boom Demographic created a stock market bubble and Greenspan enabled the over expansion of that bubble by his fiscal policies.
The same moronic Baby Boomers running our Industry allowed their Kumbaya, We Are the World upbringing to delude them into exporting our Industrial Base to Asia , especially China. Greenspan encouraged this by his currency manipulation before the Stock crash and then ruthlessly used this as tool control the usual Inflationary impact of his post Stock Crash easy money policy., the net effect of which was to destroy domestic manufacturers by allowing Chinese sweat shops to knock off American goods at selling prices less than the cost of raw materials for domestic manufacturers.
Worst of all, he was too slow in dealing with the Housing Bubble so it was well into the exponential explosion before he tried to pop it. When he did finally try to pop the bubble he found he had totally lost control of the US Economy because of his feckless economic policies world wide wiped out his ability to use the Policy Interest Rate and other monetary tools to regulate the economy.
Greenspan was disaster for America and his actions have set the stage for the continued decline of the US Economy that we are now experiencing
I’ll bet he does. In additon, buy some food too. Inflation hit the grocery stores big time since the 2008 crash.
This is probably not an indication of a healthy economy.
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That’s correct. It is not an indication of a healthy economy. The stock market is up due to the devalued dollar(ie inflation).
It takes more dollars to buy the same amount of stock, because the dollar is not worth as much as it was. Helicopter Ben keeps printing money to try to keep the market up.
As things turned out, Barney Frank won.
I think Greenspan was smart in resigning because, thanks to Congress, there was nothing he could do about Bareny Frank and company.
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