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Post 1
Brooksley Born Excoriates Alan Greenspan: “You Failed”
midnight (1000+ posts) Wed Apr-07-10 01:46 PM
Original message
Brooksley Born Excoriates Alan Greenspan: “You Failed”
Source: FDL
“You failed to prevent many of our banks from consolidating and growing to a size that are now too big or too interconnected to fail,” Born added. She added that Greenspan’s views on deregulation, which he took as an article of faith, contributed to the Federal Reserve’s failure in delivering on its mandate.
Looking as angry as he could at his advanced age, Greenspan replied, “The flaw in the system I acknowledged was an ability to fully understand the state of potential risks that were fully untested… That means we were under-capitalizing the banking system for 40 or 50 years.”
He then pivoted to a defense of his work, using an innocent bystander argument. “I don’t have the discretion to use my own ideology to affect my judgments on what Congress did. If somebody asked my view on a particular subject, I would give it to them. But I ran my office as required by law… I fundamenally disagree with your perspective.”
This is frankly ridiculous. Alan Greenspan was known during his days at the Fed as “The Oracle.” Every word of his moved the markets and moved politicians. His viewpoints absolutely contributed to the deregulation of the financial sector. He also had lots of broad discretion while at the Fed to deal with the housing bubble. Instead he hyped it.
If anyone was watching this but me and the WSJ, they would have seen a cornered rat. Born nailed Greenspan – although, given the relative lack of interest in the FCIC, the benefit to that will be merely psychic in nature.
[continuing]
More from the Democrat Underground. Not my words — just quotes ....
6. Legal fraud. They were all advocates of legalized fraud. That’s what they wanted and that’s what they got, with regard to deregulation.
16. You have to read about that dope head b*** [Ayn Rand] to really see what an non event her life and writings really were. Conservatives have her, Reagan (f—ing r-word idiot), “w” (what more needs to be said about him) and that’s about it. I mean you have the conservative “intellectuals” like George (I love baseball) Will and Newt (do as I say, not as I do) Gingrich and I think that’s about all.
15. F— Ayn Rand, stupid, sexually perverted, f—ing speed freak b—.
3. Honestly, does Greenspan even care? I don’t believe he was stupid, but he did gamble. But not with his money, schmuck.
5. I think your right on about him not caring.
26. he got his golden parachute. nt
7. Brooksley Born was a hero, she certainly can speak about this as she tried to stop them, Greenspan included, and Obama’s current team of deregulators, from doing what they were doing. For her trouble, they aligned themselves against her and had her removed ~ we owe the Clinton administration another thank you for that.
I don’t buy that Greenspan didn’t know what he was doing. He was working for Wall St. I remember I used to wonder who or what this guy was with the briefcase, who never seemed to go away no matter who was president. And why so many people seemed to think that what he had to say was important.
The media never interviews people like Brooksley Born who is a financial genius and she knew what they were up to.
There is a PBS or Frontline video of her story online, it explains everything about how they destroyed this country’s economy and how she tried to stop them.
9. Actually it is the opposite. His Randian personal ideology is what got the country into trouble, not the legal regulations.
30. because her ideology was anti-regulation.
10. greenie, who wailed that the surplus was going to completely pay off the entire national debt. so we needed to hurry, hurry, and cut taxes for the rich A LOT before the government has SO MUCH MONEY THEY CAN’T FIGURE OUT WHAT TO DO WITH IT ALL! so of course they cut taxes before we barely make a dent in the debt, and unsurprisingly, the debt is now far bigger than ever.
the ultimate irony is that the scenario greenie so much wanted to avoid was the government holding equity in private companies because there was no other place to park all that extra loot. so when the financial sector crumbled, what did the fed do?
why, buy up equity in private companies, of course.
11. Truth to Power and yet look what happened to her career when she spoke up... No good deed goes unpunished I guess.
12. ‘The Warning’ Anyone who hasn’t seen this video from Frontline should watch it. Greenspan, Rubin and Summers played a direct role in the collapse of the economy. Brooksley Born tried to stop them but she was driven out of her job and viewed as causing trouble.
Born’s battle behind closed doors was epic, Kirk finds. The members of the President’s Working Group vehemently opposed regulation — especially when proposed by a Washington outsider like Born.
“I walk into Brooksley’s office one day; the blood has drained from her face,” says Michael Greenberger, a former top official at the CFTC who worked closely with Born. “She’s hanging up the telephone; she says to me: ‘That was Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”... 13 bankers in his office who informed him of this. Stop, right away. No more.’”
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming,” Kirk says. “Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves.”
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
“It’ll happen again if we don’t take the appropriate steps,” Born warns. “There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.”
They cover for each other. Greenspan is pretending that he was just mistaken. But this video shows how unwilling any of them were to even to listen to a voice of reason as all of them believed in an unregulated market. Born should have been considered an asset to any administration that really cared about the country’s best interests. Instead, she was driven out of her job, and there was no one else who could stop them.
She was right then, and if she is right now, and there’s no reason not to believe she is considering we have the same people in charge of it all again, we will face more disaster.
[It goes on, but that’s where I left off.]