The Lies of Alan Greenspan

William Grieder has the definitive, must read takedown of former Fed Chair’s recent revisionist history/book tour. Grieder writes in The Nation:

"Alan Greenspan has come back from the tomb of history to correct the record:

-He did not make any mistakes in his eighteen-year tenure as Federal Reserve chairman.

-He did not endorse the regressive Bush tax cuts of 2001 that pumped up the federal deficits and aggravated inequalities.

-He did not cause the housing bubble that is now in collapse.

-He did not ignore the stock market bubble that subsequently melted away and cost investors $6 trillion.

-He did not say the Iraq War is "largely about oil."

Check the record. These are all lies."

Wow.

Go read the full post . . .

Source:
The Lies of Alan Greenspan
WILLIAM GREIDER
BLOG | Posted 09/17/2007 @ 11:13am

http://www.thenation.com/blogs/notion?pid=233482

What's been said:

Discussions found on the web:
  1. volcano commented on Sep 19

    Yeah. At least he didn’t say:

    I did not have sex with that woman.

  2. wally commented on Sep 19

    In the dumbness sweepstakes, AG makes a move to pull in front of OJ…

  3. matt m. commented on Sep 19

    Much like a baseball manager, the Fed. chief always gets too much credit and too much grief from the gallery. That said… The Nation and David Corn are poor examples of solid journalism. Their far-left hysteria renders any article unreadable.

    ~~~
    BR: I am not a reader of the Nation, but I remember Willaim Grieder from his Rolling Stones days — I used to liked the mag when it was him and Hunter S. Thompson covering national affairs.

    Regardless, his criticism remains quite valid.

  4. Tom B commented on Sep 19

    “-He did not say the Iraq War is “largely about oil.”

    Someone help me out here: since the Iraq war is and always has been about oil, why can’t we do the following: abandon rat holes like Baghdad– indeed, abandon ALL the cities. Let the Shiites and Sunnis kill each other off, like they’ve been doing for over 100 years. Put all our troops around the key, biggest oil fields, most of which, presumably are not in urban centers. My understanding is that oil production in Iraq is still BELOW what it was pre-“liberation”.

  5. PeterR commented on Sep 19

    Nice typo in the next to last sentence of the (“full post” link) article. Come on Nation, is anyone awake there?

    Not to mention that his quibble about the oil issue seems pedantic and childish. Weren’t we all a bit taken aback (in a refreshing way) to hear Greenspan acknowledge that Iraq is about oil (in some way)? How much might you have bet against him being this candid? Plenty IMO.

  6. SPECTRE of Deflation commented on Sep 19

    Not to mention that his quibble about the oil issue seems pedantic and childish. Weren’t we all a bit taken aback (in a refreshing way) to hear Greenspan acknowledge that Iraq is about oil (in some way)? How much might you have bet against him being this candid? Plenty IMO.

    Posted by: PeterR | Sep 19, 2007 9:03:25 AM

    He’s more full of shit than a Christmas Turkey, and anyone who thinks otherwise is a damn fool.

  7. Marcus Aurelius commented on Sep 19

    Our leaders would never lie to us! This is America!

  8. Marcus Aurelius commented on Sep 19

    Dad to family:

    Kids, your mom and I have some news. We’ve both lost our jobs due to the recent downturn in the economy. But don’t worry – we still have credit cards! Now, what say we pile into the ol’ Hummer and head on down to the Outback? I’m in he mood for a rib eye!

  9. Pool Shark commented on Sep 19

    Well, Ben-Dover’s plan to help out homeowners is backfiring…

    The 10 and 30 year treasuries are swooning. Yield on 10-year is over 4.55%, and 30-year is over 4.86%.

    So all those distressed ARM-holders who celebrated the fed cut, thinking they were going to get lower rates are about to get whacked.

  10. Gary commented on Sep 19

    I read the testimony regarding tax cuts that was linked to. Greenspan didn’t lie that I can see. His testimony may have been distorted by the administration for its own purposes but there’s no endorsement of Bush’s tax cuts, just that a tax cut may be useful.

    “In today’s context, where tax reduction appears required in any event over the next several years to assist in forestalling the accumulation of private assets, starting that process sooner rather than later likely would help smooth the transition to longer-term fiscal balance. And should current economic weakness spread beyond what now appears likely, having a tax cut in place may, in fact, do noticeable good.”

    “As for tax policy over the longer run, most economists believe that it should be directed at setting rates at the levels required to meet spending commitments….”

    “But let me end on a cautionary note. With today’s euphoria surrounding the surpluses, it is not difficult to imagine the hard-earned fiscal restraint developed in recent years rapidly dissipating. We need to resist those policies that could readily resurrect the deficits of the past and the fiscal imbalances that followed in their wake.”

    Of course, I don’t recall his speaking out later regarding Bush’s cuts and since he was speaking for himself in that testimony he probably should have just kept quiet.

    After two wars, massive deficits, two asset bubbles, a massive transfer of wealth to the rich, LBOs and stock buybacks rather than investment, etc, etc, I am no fan of Greenspan and the role he played enabling it all. As always, his comments are hedged.

  11. Fred commented on Sep 19

    Why all the incessant fuss over Elmer Fudd?

    We have a new (better) Captain at the helm, and I give him huge snaps for his actions so far. I know many call him Helicopter — but remember that that quote is taken WAY out of context from where it came.

    While people grouse over GS’s “legacy”, equities are making a HISTORIC move…

  12. wunsacon commented on Sep 19

    From that article alone, I don’t think AG is backpeddling on Iraq. According to the article, AG said “it’s about oil” in his book and now says “it’s about oil security”. It’s not a contradiction. It’s more specific.

    No one *I* know who says “it’s about oil” thinks Bush went into Iraq to grab Iraq’s oil and pump it out for free or even somehow cheaper than market. (Saddam was selling us his oil anyway.) The US is active in the *region* because of oil, to secure oil supplies without a war premium on a long-term basis. (Not that Bush’s war has had the desired effect so far. But, after all, he planned to fail.)

    So, to repeat, I see no backpeddling by AG on this issue.

  13. Tom B commented on Sep 19

    “But, after all, he planned to fail.”

    You mean it wasn’t the usual Bush incompetence?

  14. wunsacon commented on Sep 19

    I reused the second half the “fail to plan, plan to fail” cliche. Yes, it was W’s usual incompetence. (Boy, did that apple fall far from the tree.)

  15. Paul commented on Sep 19

    The Bigger they are – the bigger the Target
    Alan was very big – he was very strong in our economy – between 1970 and 2000 this for get short term glitches – in that 30 years alan greenspan was the chair of the fed 18 years.

    In that 30 years this country did all right and recovered nicely – no one man – giant – can turn an economy of 300 million people as a result of Greed, Politics,etc. He did a pretty good job. Volker did a very good job – Bernanke is the whore – can you imagine the shock of leaving the aura of Princeton and entering the world of, Remember the Star Wars scene in the interspace aeroport at the Bar – can you imagine Bernanke’s response to walking into that bar?

  16. RM commented on Sep 19

    You guys are great. Like a bunch of armchair Fed Chairmen. If you correctly forecasted all of these events, go get your PhD and try to get a job at the Fed. The country obviously needs someone with YOUR intelligence.

  17. Tom B commented on Sep 19

    “You guys are great. Like a bunch of armchair Fed Chairmen.”

    That’s a cheap shot. The problem isn’t that Bernecke is stupid or anything, just that he chooses to reward the wrong people; the people who, by and large, DESERVE to lose their shirts. At the COST of screwing EVERYBODY else. The dollar is worthless now– you know we’re like 1:1 with Canadian currency now?

  18. wunsacon commented on Sep 19

    Tom B, I agree it was a cheap shot. But, the blame for the dollar can sure be spread around. On average, Americans supported tax cuts and bigger spending. No FED chairman is going to save the “reversion to mean” of a currency of a nation of spenders amidst a deterioration of their competitive advantages.

  19. maximo zeledon commented on Sep 19

    I used to read The Nation in college, but it never gave me much in terms of a realistic perspective of the world–particularly on economic matters. Their moral crusade is simply to blame the financial system. It’s no wonder the American left is of little relevance today. The piece is too simplistic to the point of childish for lack of a better word.

  20. riverrat commented on Sep 19

    wunsacon is correct in saying that Americans support tax cuts- asking them/us if we want a tax cut is like asking a kid if he wants a candy bar. The Republicans know this and have used it to recklessly cut taxes to the great detriment of our long term future. We have gotten to the point that talking about tax increases to cover the cost of government is like a poison pill for a political campaign, even as our country goes into unprecedented debt.

    I also agree with Tom B.- Our elected government officials- including many Democrats- have largely shirked their duties to help Americans understand that we can’t always have our cake and eat it too. That social services and wars cost a lot of money and that our nation’s long term economic health is being endangered by reckless borrowing to avoid some short term discomfort.

    Unelected officials such as Bernanke are in a better position to make choices that might cause some pain in the short term but will make us more secure in the long term. This is not to say that elected officials don’t have similar responsibilities, but Bernanke does not have the excuse of the need to get re-elected and thus avoid any bad news (i.e. the need to raise taxes) no matter how realistic.

    IMO Bernanke has shirked his duties. Unless there is more going on behind the scenes with the big banks and their shaky finances that we are not aware of, his move is hard to understand and wildly irresponsible.

  21. Tom B commented on Sep 19

    “No FED chairman is going to save the “reversion to mean” of a currency of a nation of spenders amidst a deterioration of their competitive advantages.”

    The competitive advantage can be restored by 1) more school spending 2) modest tariffs. I know the latter point will be a bit controversial, but, consider— places like China have ZERO quality standards (Lead in toys, etc). American companies (as deregulated as we are) have SOME scruples.

  22. me commented on Sep 19

    “Our leaders would never lie to us! This is America!”

    Wait, I thought lying was the virtue of capitalism? You know, like now you have a pension, now you don’t.

  23. wunsacon commented on Sep 19

    Tom, I don’t know that we have to spend more on education. Maybe we do. (I don’t know enough.) But, I wish one of our states would try vouchers.

    I recall Perot recommending we should impose tariffs until trading partners enact laws like OSHA and establish agencies like the EPA. I would like to see us implement graduated tariffs by country, based on their compliance.

  24. Bonghiteric commented on Sep 19

    All of our opinions are noise in the data–just a tick on the tape of the long-term domestic/global financial outlook.

    The U.S. and global economies are dynamic. If the U.S. is in or goes into a recession it will emerge from a recession. If the dollar crashes it will eventually rise. Prices have gone up every year since I started buying stuff in ’74. Big f’in deal. Inflation happens. People in power always make decisions some of us don’t agree with. In the long term the depth of the rate cut doesn’t matter if you are disciplined in the way you pick and trade your asset classes.

  25. jeopardy commented on Sep 19

    Not fair.

    In various interviews I have seen, he did admit he didn’t foresee the RE financing go so out of control.

    BTW, didn’t he say “irrational exuberance”?
    What more do you want the Fed Chairman to say?
    “Please sell stocks, they are so overvalued”? No way.

  26. Tom B commented on Sep 19

    “In the long term the depth of the rate cut doesn’t matter if you are disciplined in the way you pick and trade your asset classes.”

    I’m an individual investor holding way, way too much cash (about 60% of my liquid assets), since the job market is so uncertain these days. I’d LIKE to be holding a lot more foreign stock, since most economies are doing better than ours right now. Maybe I need T-bills….

  27. stormrunner commented on Sep 19

    Americans support tax cuts- asking them/us if we want a tax cut is like asking a kid if he wants a candy bar.
    Republicans know this and have used it to recklessly cut taxes to the great detriment of our long term future.
    ________________________________

    Not to roll a dung ball by, but the primary prerequisite, to Bebt-Based Fiat is the levying of taxes by Government Fiat or Mandate to secure the use of said “bills of credit”. By allowing Private central banks to issue the currency at interest, this guarantees an interest income stream proportional to the rate of growth of the money supply to the uber elite. After a time servicing the debt becomes the only destination of the proceeds of taxation. The politicians now elected by strong lobbying monetary forces the result of this taxation have no political will to restrain the growth of government.

    Every single red cent of taxes collected goes to service the debt, with all current operating costs being borrowed.

    Why would anyone not want tax relief. The American people have their income streams directly assessed while the CB’s though inflation confiscate what ever else is available while trying to maintain consumerism. No wonder the consumer has taken to borrowing in order to purchase.

    This is not a short sighted response on the part of the people but an abuse levied on the populace by the system. Goverment potends to give to the people what it does not own though confiscation and redistribution the poor and middle class whom have no lobby rarely benefit.

  28. wunsacon commented on Sep 19

    >> the primary prerequisite, to Bebt-Based Fiat is the levying of taxes by Government Fiat or Mandate to secure the use of said “bills of credit”.

    The FED couldn’t print “bills of credit” without levying taxes?

    >> Every single red cent of taxes collected goes to service the debt, with all current operating costs being borrowed.

    All that debt comes from *previous* unfunded spending. This is the collective weight of all previous “let’s cut taxes” campaigns. Our parents wanted a free lunch and they gave us the bill. (What’s the current generation’s answer? “Give our kids a bigger bill.”)

    >> Why would anyone not want tax relief. The American people have their income streams directly assessed while the CB’s though inflation confiscate what ever else is available while trying to maintain consumerism. No wonder the consumer has taken to borrowing in order to purchase.
    >>This is not a short sighted response on the part of the people

    If you’ve ever watched Jay Walking (or similar), you’re giving most of them way too much credit.

    Americans want tax cuts even when it implicitly means not supplying troops with body armor, fixing bridges, prosecuting more cases, getting kids into counseling before they shoot up a school, and designing/building dikes that work. Ask any one of them individually about the importance of these items and they’ll be for them. But, when it comes to them having to pay for it, they’ll think it’s someone else’s responsibility. (Hey, don’t all reach for the check at once…)

    Some of them say “I’d pay if I knew it would make a difference”, implying that performance matters. But, then when someone utterly underperforms in office, most of them stick by their candidate/party anyway.

    Most people want government “on the cheap”, both in terms of money and their own time. They want to pay little in taxes and spend most of their time watching ESPN, a little MSM, and very little of their time reading non-MSM news. Well, “TANSTAAFL”.

  29. Tom B commented on Sep 19

    Wunsacon:

    Sad to say, I utterly agree with your last post.

    An Idiocracy! But didn’t the Gipper tell us we could have our cake and eat it, too?

  30. stormrunner commented on Sep 19

    Wunsacon said,

    The FED couldn’t print “bills of credit” without levying taxes?

    ____________________________

    Obviously not, they’re Bills of Credit, credit indicative of debt, debt that must be repaid.
    The premise behind Fiat Money is the necessity of the citizen’s to pay the tax levied in the Fiat Currency issued. This is what creates its value. If they do not have said currency they must convert other holdings to it. It is no coincidence the FED and the IRS were established in the same year. Please refer to “The Money Masters” or “Fiat Empire” for clarification,

    http://video.google.com/videoplay?docid=-515319560256183936&q=Money+Masters&total=1142&start=0&num=10&so=0&type=search&plindex=0
    Fiat Empire

    http://video.google.com/videoplay?docid=5232639329002339531&q=Fiat+Empire&total=57&start=0&num=10&so=0&type=search&plindex=0

    And please stop blaming your parents and grandparents.

    Their only mistake was belief in a system that is designed to do precisely what it is doing. And if you took the time to watch the videos you would see that our grandparents gave their lives to stop the “Money Trust”.

    Yes lazy stupid people exist, But so too do intelligent nefarious blood-suckers. What is it exactly that we fund every year that the debt never recedes, no great public works projects, no Apollo Programs, nothing but social welfare and a great Military Industrial Complex. Most, especially those here, didn’t vote to fund welfare, social security maybe, but they were led to believe they paid for it while the coffers were ransacked, this is the candy distributed by the politico’s to buy votes and expand government. Don’t label me as irresponsible when nearly 50% of everything I earn goes to some sort of tax with the rest that I squirrel eaten by inflation, this is ludicrous how much more are you willing to pay!!

  31. stormrunner commented on Sep 19

    And Wunsacon

    Your right about Carlin, he gets it,

    http://www.youtube.com/watch?v=9dY4WlxO6i0

    go right to the end then pay particular attention to the rolling text and the Bush voice voice overs.

    Some how you missed the part about the “owners” and how they got to be “the owners” it is explained in those links.

  32. techy2468 commented on Sep 19

    Stormrunner….i disagree with your whining about paying too much in tax and inflation…

    usa is (maybe was after 6 months) one of the he best developed country in terms of taxation. or in terms of income to cost of living.

    if i am not wrong canada/norway etc have income taxes of upto 45%, and sales tax of upto 15%.

    and they are all going to be part of the inflation….caused by the cheap money circulating around the globe…
    (unless they continue to appreciate their currency as dollar falls….)

  33. stormrunner commented on Sep 19

    It’s not so much the paying as where the money goes. If you think that my worries of my child not being able to support a household with housing at a 10X factor median income with health care nearly 10% is whining then your right I’m whining. Congratulations you just had your stealh tax icrease yesterday.

    As for the Canadian Labor view spend some time here.

    http://video.google.ca/videoplay?docid=-1355300745194023737

    This woman seems to be completely credible. Probably just another whiner.

  34. wunsacon commented on Sep 19

    Hi stormrunner,

    >> And please stop blaming your parents and grandparents. Their only mistake was belief in a system that is designed to do precisely what it is doing.

    Hey, I’m judgmental like that. Waddayaknow!

    They didn’t vote for tax cuts without spending cuts? They don’t know that deficit spending leads to more debt? That the service on that increasing debt would grow and crowd out other spending? I know my parents are smart enough to understand this. But, they’re too lazy to bother to think it through. My dad liked the extra $1k in his pocket. (The fact that he spent it on higher commodity prices is something he’ll understand now. But, not at the time.)

    >> Most, especially those here, didn’t vote to fund welfare, social security maybe, but they were led to believe they paid for it while the coffers were ransacked, this is the candy distributed by the politico’s to buy votes and expand government.

    People continue to vote for these things and for candidates who’ll promise to cut taxes at the same time, adding to our debt servicing costs that crowd out other spending.

    >> Don’t label me as irresponsible when nearly 50% of everything I earn goes to some sort of tax with the rest that I squirrel eaten by inflation, this is ludicrous how much more are you willing to pay!!

    Buffett says he pays about 15% (and says he thinks this is wrong). We went from a progressive tax rate to a flat tax rate to, now, a regressive tax rate.

    >> go right to the end then pay particular attention to the rolling text and the Bush voice voice overs.
    >> Some how you missed the part about the “owners” and how they got to be “the owners” it is explained in those links.

    Ah, yes, I agree with both you and “Sir Charles”:
    http://en.wikipedia.org/wiki/Charles_Barkley#Politics

    ;-)

  35. stormrunner commented on Sep 19

    They didn’t vote for tax cuts without spending cuts? They don’t know that deficit spending leads to more debt?
    ________________________

    I know this is getting beat to death but it doesn’t matter what thay knew, anymore than it matters what we know now, the FFR Usury fee, funds any lobbying necessary to thwart any common sense implementation wanted by the people, take sealing the southern border for instance. Responsable adults want health care for children, emergency rooms are mandated by federal law to treat the uninsured, the Money Trust wants cheap labor, the FED’s ficilitates the influx. The GOP lost seats everywhere over disconnect with the constituancy, voted and funded a border fence bill to protect the American worker so maybe we can pay these taxes and what happens, no fence and Mexican Tractor Trailers to bring goods up from the Panama canal which we seceded the ports to the Chinese, two ports at entrances one on the Atlantic, one on the Pacific, all this so the industrialists can aquire cheaper labor to do the jobs Americans won’t, like driving trucks!!

    http://www.hutchison-whampoa.com/eng/ports/international/the_americas.htm

    The FED’s utter lack of regard for their “currency”, note it is not “ours” if it were, the usury (FFR) would be a debit to the nation’s balance sheet, is so blatantly obvious as to “repel the mind”
    They need to create more interest income to further the agenda, Folk’s this is not conspiracy this is what it is.

  36. stormrunner commented on Sep 19

    Yeah, gotta keep those back legs in shape, ya know.

  37. Eclectic commented on Sep 19

    Gary,

    I, for one, recognize you for the o-b-j-e-c-t-i-v-o-l-o-g-i-s-t that you are. Cherish it, dear boy… you won’t get recognition elsewhere.

  38. Greg0658 commented on Sep 19

    riverrat – Republicans are bankers and big business

    why not deficit spend for big projects and the like

    the payoff with interest takes care of both entities and there is seemingly enough naives that get trickle down to make the vote work for them

    I wonder without war where would they be in this cycle that includes so much globalization?

  39. a guy called john commented on Sep 19

    wow. talk about wanting to be liked: i just heard an npr interview w/ greenspan saying he was very concerned about income inequality. even better, he said he could smell the smoke of marijuana from 50 feet (but never smoked the stuff)!

  40. Winston Munn commented on Sep 19

    Stormrunner:

    One minor quibble – fiat money in and of itself is fine. Remember, money is only a representation of labor and can be anything – sea shells, as Eclectic has pointed out, or old Baby Ruth candy bar wrappers – it is irrelevant what it is as long as it is accepted as representative of value.

    The problem has occured due to “the usual suspects”, i.e., human nature. Human nature ruins economic models. Always has. Always will.

    The problem is not fiat, per se, but debt-based fiat.

    The good news is that at present rate of debt we will soon be just as well off trading with sea shells or Baby Ruth candy wrappers as dollars.

    Welcome to Brazil-America, home of once middle class laborers, now cabana boys running to bring another pina colada to the world’s elite.

  41. stormrunner commented on Sep 19

    Winston

    Thanks Winston, was hoping not to be a troll, still wish others here were more open to chartalism.

    Thats why I always begin my rants with Debt-Based Fiat, and continue that the Issuance Usury is the underlying virus. Its cooked the system, blaming our extended families, divide and conquer, this is madness. Some guy over at Roubini’s couldn’t wait for all the “boomers” to drop dead, just because they had the good fortune of being present during the beginning of the debasement. People think that voting and micromanaging their reps is the answer when their reps are already being micromanaged by the usury funded lobby, hence my border fence reference, the system needs work but the work can’t begin till the problem is understood.

    First post to thread.
    >>>Not to roll a dung ball by, but the primary prerequisite, to Bebt-Based Fiat is the levying of taxes by Government Fiat or Mandate to secure the use of said “bills of credit”.

  42. pd130 commented on Sep 20

    I’ll vouch for gcj on the npr interview. If you didn’t hear it, you might not believe it, but ag really did say all that pathetic stuff. He didn’t inhale.

    However, I don’t know what all that business in the Jan. 25, 2001 testimony about private asset accumulation (to be eschewed) is unless it’s a veiled but ready-made justification for the coming tax cuts. You know, just like a game where you hide a treat for a child and let him “discover” it.

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