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Has Greenspan lost his mind?
Topic Started: Oct 24 2008, 08:46 AM (483 Views)
Dwayne
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I came across an article in the Financial Post titled Greenspan concedes his ideology was flawed. And just what ideology is that? According to the article...
Quote:
 
Former Federal Reserve chairman Alan Greenspan said a "once-in-a-century credit tsunami" has engulfed financial markets and conceded his free-market ideology shunning regulation was flawed [emphasis mine].

"Yes, I found a flaw," Mr. Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. "I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well." Mr. Greenspan added he was "partially" wrong for opposing the regulation of derivatives.

Mr. Greenspan's contrition came after lawmakers and Fed watchers increasingly blamed the former Fed chairman for helping cause the crisis with lax oversight of the housing boom and derivatives markets. [emphasis mine] Normally afforded deference by Congress, he endured almost four hours of questions from lawmakers less than two weeks before a national election.

http://www.financialpost.com/story.html?id=903750

In my opinoin, the above article is just a blatant ideological attack on free market capitalism. Part of the reason I believe this is that the article spins an impression that a free market ideology is flawed and blames Greenspan for "lax oversight of the housing boom", but never mentions the democrats' own role that lax oversight. All the while, the article totally ignores Greenspans words from 2005...
Quote:
 
Federal Reserve Chairman Alan Greenspan Thursday suggested that the nation's mortgage lending giants, Fannie Mae and Freddie Mac, are taking advantage of their implicit government subsidy to pad their profits with investments that are too risky, which is not helping the nation's homeowners.

"The Federal Reserve has been unable to find any credible purpose for the huge balance sheets built by Fannie and Freddie other than the creation of profit through the exploitation of the market-granted subsidy," Greenspan said in a speech at a conference sponsored by the Federal Reserve Bank of Atlanta.

http://money.cnn.com/2005/05/19/news/economy/greenspan_fannie/

Why can't Greenspan stand up and throw his own words from 2005 back in the faces of democrats and the media? Maybe it has something to do with his wife, NBC journalist Andrea Mitchell.

To me, this looks more and more like a scheme to destroy capitalism and free markets, and the media and the left are blatantly spinning all this as the excess of free market capitalism. This is done, because that's what the Left has to do in order to garner the support necessary to make all of changes it desires, but not so much because capitalism and free markets some how take attention from the Left's solutions, but because capitalism and free markets are antithetical to their solutions.

For the left, free market capitalism -- as we know -- it must be destroyed. The only way to accomplish that in America is to convince the American public that the changes are necessary to insure their own economic survival, and it seems that in order to bring that about part of the plan is to destroy our faith in the man who guided the financial health of the nation for so many years.
Edited by Dwayne, Oct 24 2008, 09:10 AM.
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ImpulseEngine
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:rotfl:

You gotta love it. Greenspan admits his ideology was flawed - let me repeat that - HIS ideology was flawed and HE admitted it - but somehow you, Dwayne, see that too as somehow "the Left"'s doing. :rolleyes: Tell me, just how did "the Left" coerce Greenspan into admitting a flaw that doesn't exist and into doing so publicly?

And good for Greenspan for being man enough to be able to admit a mistake and NOT blame everything on "the Left" or others simply because it's convenient.
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Dwayne
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He's lost his mind, because he EXPLICITELY WARNED about the danger in 2005... just as the article I cited from CNN shows, and he never defended himself based on his own words from 2005.

The reason Greenspan just might be saying these things is that he believes democrats are going to take control and that democrats will find a sacrificial cow to blame for all this which doesn't point fingers back at democrats themselves, and so Greenspan is protecting himself from being totally blamed by democrats to beinging man enough to be able to admit a mistake and put the blame on free market capitalism... After all, he'll be dead in a few years and won't have to suffer living under socialism, and his reputation secured with his admission, he won't have to worry about all the blame being left on his shoulders.
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RTW
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2005 - "Fannie Mae and Freddie Mac, are taking advantage of their implicit government subsidy to pad their profits with investments that are too risky,"

2008 - "My fault"


It looks to me that Greenspan is trying to curry favor with his potential new boss. It was a wise career move for him to conveniently forget the hearings about this in 2004.
http://www.youtube.com/watch?v=_MGT_cSi7Rs&
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Dwayne
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Another thing that IE totally ignores is that my post is more a point about the media than it is about Greenspan.
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Dwayne
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Here's an editorial that really drives home the point I'm making here...
Quote:
 
EDITORIAL: Whitewashing Fannie, Freddie

Friday, October 24, 2008

Former Federal Reserve Chairman Alan Greenspan's congressional testimony yesterday on the economic crisis was surreal. During his appearance before the House Government Reform and Oversight Committee, Mr. Greenspan, and Committee Chairman Henry Waxman of California and other Democrats, spent much of their time dancing around the political decisions that created the subprime-mortgage-market collapse. This behavior should not come as much of a surprise. Both Mr. Greenspan and the liberal Democrats who control the committee have important reasons not to delve too deeply into the role of Congress in pushing Fannie Mae and Freddie Mac to the brink of collapse, a financial catastrophe that will cost taxpayers $200 billion.

As liberals, Mr. Waxman and the Democrats seek to depict what has happened to the housing market as a catastrophic failure of private enterprise brought about by "greed" and irresponsible behavior by private investors. Although he retired as Fed chairman in 2006, Mr. Greenspan remains much in demand by politicians wanting economic advice. He understands very well that the Democrats control Congress, and are likely to become much more dominant after Nov. 4, so it probably is not a very good idea to talk at length about the perverse incentives politicians created for Fannie and Freddie. That helps to explain why Mr. Greenspan (one of the least contentious people in Washington) put much of the blame for the subprime collapse on "overeager" investors rather than on the politicians interrogating him. And he gave short shrift to his own warnings about the financially questionable activities of the GSEs - which official Washington failed to act upon.

In 2003 and 2004, Fannie and Freddie were hit by accounting scandals that forced out some of their most senior officials. But Congress did nothing to fix the situation. The House Financial Services Committee crafted a reform bill that was severely weakened by GSE lobbying — so much so that the Bush administration refused to support it. Similarly, the threat of a Democratic filibuster killed a much tougher Republican bill in the Senate. During this period, Mr. Greenspan called for reforming the GSEs. In testimony before the Senate Banking Committee on Feb. 24, 2004, for example, he called on Congress to place limits on the size of Fannie and Freddie's portfolios in order to restrict their issuance of debt. But Congress failed to listen, and the Bush administration lacked the political muscle to pressure it to do so. Instead of reining in the GSEs, powerful members of Congress put pressure on Fannie and Freddie to massively expand investment in financially risky "affordable" housing projects from 2005 to 2007, ultimately triggering the GSEs' collapses. Irresponsible politicians — not "market failure" — bear primary blame for these financial disasters.

http://www.washtimes.com/news/2008/oct/24/whitewashing-fannie-freddie/
Edited by Dwayne, Oct 24 2008, 04:17 PM.
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whitestar
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Dwayne
Oct 24 2008, 08:46 AM
To me, this looks more and more like a scheme to destroy capitalism and free markets, and the media and the left are blatantly spinning all this as the excess of free market capitalism. This is done, because that's what the Left has to do in order to garner the support necessary to make all of changes it desires, but not so much because capitalism and free markets some how take attention from the Left's solutions, but because capitalism and free markets are antithetical to their solutions.

For the left, free market capitalism -- as we know -- it must be destroyed. The only way to accomplish that in America is to convince the American public that the changes are necessary to insure their own economic survival, and it seems that in order to bring that about part of the plan is to destroy our faith in the man who guided the financial health of the nation for so many years.
The Democrats have been in power before, right?
Why, if they gain govt, should it signal the end of free market capitalism?
Didn't Greenspan mention it was his own fault for overestimating the self interest of survival, believing it would overide irresponsible business practice, meaning further regulation would be unnecessary?
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RTW
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whitestar
Oct 24 2008, 07:39 PM
The Democrats have been in power before, right?
Why, if they gain govt, should it signal the end of free market capitalism?
Based on the statements and ideas of those running for office.


whitestar
Oct 24 2008, 07:39 PM
Didn't Greenspan mention it was his own fault for overestimating the self interest of survival, believing it would overide irresponsible business practice, meaning further regulation would be unnecessary?
Chalk that up to brown-nosing the new bosses. His comments from 2005 have already been posted.


http://www.youtube.com/watch?v=_MGT_cSi7Rs&
http://www.youtube.com/watch?v=LPSDnGMzIdo&NR
http://www.youtube.com/watch?v=ivmL-lXNy64
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Dwayne
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whitestar
Oct 24 2008, 07:39 PM
Why, if they gain govt, should it signal the end of free market capitalism?
I think your other questions have been answered sufficiently, but I want to address this question directly.

One thing I need to make clear is that the premise of your question suggests that by the very act of a democrat taking office, some how capitalism will end. I have made no such assertion. What I do assert is that every time democrats have power in numbers sufficient to enact and pass legislation, they've always attempted to place greater and greater parts of the economy under government regulation or control. The last time democrats enjoyed having the White House, House of Representatives and the Senate, they attempted to enact Hillary's healthcare program. No one wanted it then, and doubt few want it now, but I can assure you, even considering the fact that over 65 million Americans will not want socialized medicine in any shape or form, the democrats will try it again. And sadly, with the willing help of America's national media, democrats may get a filibuster proof majority in the Senate, which would be the only thing protecting the 65 million or so Americans who wouldn't want socialized medicine at all.
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whitestar
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RTW
Oct 24 2008, 07:55 PM
whitestar
Oct 24 2008, 07:39 PM
The Democrats have been in power before, right?
Why, if they gain govt, should it signal the end of free market capitalism?
Based on the statements and ideas of those running for office.


whitestar
Oct 24 2008, 07:39 PM
Didn't Greenspan mention it was his own fault for overestimating the self interest of survival, believing it would overide irresponsible business practice, meaning further regulation would be unnecessary?
Chalk that up to brown-nosing the new bosses. His comments from 2005 have already been posted.


http://www.youtube.com/watch?v=_MGT_cSi7Rs&
http://www.youtube.com/watch?v=LPSDnGMzIdo&NR
http://www.youtube.com/watch?v=ivmL-lXNy64
The first answer, based on the policies I've so far heard, the worst that could happen... the US would parallel a number of democratic nations of the world... I don't see a wholesale destruction of freedoms, of rights, of free market capitalism in my country, or New Zealand, Canada, the UK or a number of European nations. What are you afraid of? What do you see as the very worst scenerio? Whatever that vision is, do you see that fate for the nations I have listed?

The second answer, you seem to read into everything stated by everyone, a slant towards the evil leftists.. a giant conspiracy... everyone that does not come straight out with unequivical support for your view can be dismissed as being influenced by the evil left or an agent of the evil left.
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whitestar
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Dwayne
Oct 24 2008, 10:44 PM
whitestar
Oct 24 2008, 07:39 PM
Why, if they gain govt, should it signal the end of free market capitalism?
I think your other questions have been answered sufficiently, but I want to address this question directly.

One thing I need to make clear is that the premise of your question suggests that by the very act of a democrat taking office, some how capitalism will end. I have made no such assertion. What I do assert is that every time democrats have power in numbers sufficient to enact and pass legislation, they've always attempted to place greater and greater parts of the economy under government regulation or control. The last time democrats enjoyed having the White House, House of Representatives and the Senate, they attempted to enact Hillary's healthcare program. No one wanted it then, and doubt few want it now, but I can assure you, even considering the fact that over 65 million Americans will not want socialized medicine in any shape or form, the democrats will try it again. And sadly, with the willing help of America's national media, democrats may get a filibuster proof majority in the Senate, which would be the only thing protecting the 65 million or so Americans who wouldn't want socialized medicine at all.
Let the people speak, let the mayority rule. If the Democrats do realize the power to enact and pass legislation, then it will be by the mandate of the people.
Though I do understand what your saying in regards to a overbalance of left sided politics. It happens in any nation that allows a certain political colour to prevail too long, it takes the influence of both sides to keep a nation fair for all and not just one view of politics.
From my long witness of political events in my own nation, when one side diviates too far towards it's ultimate ideology then the people speak and once more it's opposite influence is given the reigns, even in good times a govt can push it's electorate beyond the limit of patience and invite there own end of power. That is the magic of Democracy, have faith in the wisdom of THE people and Democracy. If your right and their election proves to be a mistake, the people will right that mistake. You worry way too much about media bias to the left or the right, worry too much about a canditate pulling the wool of the peoples eyes. The population at large are smarter and more sophisticated than you give credit. In the long run Democracy will prevail, not Democrats or Republicans but Democracy. Thats ALL that matters.
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RTW
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Dwayne
Oct 24 2008, 10:44 PM
What I do assert is that every time democrats have power in numbers sufficient to enact and pass legislation, they've always attempted to place greater and greater parts of the economy under government regulation or control.
Well, Democrats aren't always for more oversight or regulations.
http://www.youtube.com/watch?v=_MGT_cSi7Rs&
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RTW
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whitestar
Oct 25 2008, 01:01 AM
The second answer, you seem to read into everything stated by everyone, a slant towards the evil leftists.. a giant conspiracy... everyone that does not come straight out with unequivical support for your view can be dismissed as being influenced by the evil left or an agent of the evil left.
Is it just my imagination or are you being a bit dismissive in accusing me of being dismissive? How's that for ironic?

So now, just because he changed his tune, apparently to be more agreeable to his most probably new bosses, Greenspan is suddenly an evil leftist and part of this conspiracy?

We've been warned about these specific "problems" with free-market capitalism for nearly a decade. Bush warned us as far back as 2001. I'm sure there were many others but the you-tube link I posted specifically mentions Bush. We had hearings in 2004. Greenspan himself warned us in 2005. The mortgage company I'm familiar with had huge issues with fraud 3-4 years ago and eventually had to quit "rubber stamping" mortgage applications. They had underwriters "underwriting" 20-30 files a day. For comparison, Countrywide, which is still in business and carries most of their own loans (it's their money they're loaning), expects an underwriter to underwrite 5-8 files a day.

Government required lenders to make the loan process "more fair". Those which resisted were sued and harrassed until they fell into line. Brokers and borrowers took full advantage of the situation.
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Dwayne
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whitestar
Oct 25 2008, 01:25 AM
Dwayne
Oct 24 2008, 10:44 PM
whitestar
Oct 24 2008, 07:39 PM
Why, if they gain govt, should it signal the end of free market capitalism?
I think your other questions have been answered sufficiently, but I want to address this question directly.

One thing I need to make clear is that the premise of your question suggests that by the very act of a democrat taking office, some how capitalism will end. I have made no such assertion. What I do assert is that every time democrats have power in numbers sufficient to enact and pass legislation, they've always attempted to place greater and greater parts of the economy under government regulation or control. The last time democrats enjoyed having the White House, House of Representatives and the Senate, they attempted to enact Hillary's healthcare program. No one wanted it then, and doubt few want it now, but I can assure you, even considering the fact that over 65 million Americans will not want socialized medicine in any shape or form, the democrats will try it again. And sadly, with the willing help of America's national media, democrats may get a filibuster proof majority in the Senate, which would be the only thing protecting the 65 million or so Americans who wouldn't want socialized medicine at all.
Let the people speak, let the mayority rule. If the Democrats do realize the power to enact and pass legislation, then it will be by the mandate of the people.
Though I do understand what your saying in regards to a overbalance of left sided politics. It happens in any nation that allows a certain political colour to prevail too long, it takes the influence of both sides to keep a nation fair for all and not just one view of politics.
From my long witness of political events in my own nation, when one side diviates too far towards it's ultimate ideology then the people speak and once more it's opposite influence is given the reigns, even in good times a govt can push it's electorate beyond the limit of patience and invite there own end of power. That is the magic of Democracy, have faith in the wisdom of THE people and Democracy. If your right and their election proves to be a mistake, the people will right that mistake. You worry way too much about media bias to the left or the right, worry too much about a canditate pulling the wool of the peoples eyes. The population at large are smarter and more sophisticated than you give credit. In the long run Democracy will prevail, not Democrats or Republicans but Democracy. Thats ALL that matters.
Well, see, the United States isn't a democracy... it's a constitutional federal republic that uses democratic means to elect many of the members of government. This isn't a country where if the majority of people want something they can just vote themselves what they want. There must be checks and balances.

That said, the democrats scheme for socialized medicine takes away my right to choose how I use my hard earned money, by taking more of my money. It also limits my healthcare choices. And the privacy concerns are even worse in that in the here and now, my federal government rifles through all our financial records in the democrats income redistribution schemes, which according the to Fourth Amendment is unconstitutional, but now they want all my medical records too...

That's scary stuff, imho.
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whitestar
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Dwayne
Oct 25 2008, 07:40 AM

Well, see, the United States isn't a democracy... it's a constitutional federal republic that uses democratic means to elect many of the members of government.
That certainly is food for thought Dwayne, I even looked up your own CIA factbook to see a definition of the US
"Constitution-based federal republic; strong democratic tradition"
That is scary stuff IMHO if the US does not look upon itself firstly as a democracy.
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