Alan Greenspan: Why does anyone listen to this man?

[flpoljunkie]

(Emphasis mine.)

My Father and Alan Greenspan
Robert Reich

But now another gaggle of deficit hawks is warning us against more federal spending. “The current federal debt explosion is being driven by an inability to stem new spending initiatives,” warns Alan Greenspan in Friday’s Wall Street Journal, calling for budget cuts and saying “the fears of budget contraction inducing a renewed decline of economic activity are misplaced.”

My dad learned from his mistakes. Alan Greenspan obviously didn’t.

Contrary to Greenspan, today’s debt is not being driven by new spending initiatives. It’s being driven by policies that Greenspan himself bears major responsibility for.

Greenspan supported George W. Bush’s gigantic tax cut in 2001 (that went mostly to the rich), and uttered no warnings about W’s subsequent spending frenzy on the military and a Medicare drug benefit (corporate welfare for Big Pharma) — all of which contributed massively to today’s debt. Greenspan also lowered short-term interest rates to zero in 2002 but refused to monitor what Wall Street was doing with all this free money. Years before that, he urged Congress to repeal the Glass-Steagall Act and he opposed oversight of derivative trading. All this contributed to Wall Street’s implosion in 2008 that led to massive bailout, and a huge contraction of the economy that required the stimulus package. These account for most of the rest of today’s debt.

If there’s a single American more responsible for today’s “federal debt explosion” than Alan Greenspan, I don’t know him.

But we can manage the Greenspan Debt if we get the U.S. economy growing again. The only way to do that when consumers can’t and won’t spend and when corporations won’t invest is for the federal government to pick up the slack.

For Greenspan now to say we don’t need more stimulus — when 15 million Americans are still out of work, when retail sales are dropping, when the rate of mortgage delinquencies is still in the stratosphere, when Europe and Japan are tightening their belts — is like Tony Hayward saying the Gulf spill shouldn’t worry us.

more...

http://robertreich.org/post/719313692/my-father-and-alan-greenspan

[YOY]

1. 'Coz he iz teh finansial jeeneeuz!

Anyone who draped a $-shaped wreath on the grave of Ayn Rand should be the laughing stock of the planet.

[Sebastian Doyle]

3. Seriously?

I knew he was a Rand groupie, but a $ shaped wreath?? Was it actually made out of money? :wtf:

[YOY]

4. Of course not! Flowers only. Do you think those money grubbing cretins would actually give away $?

A homeless person might stumble upon the graveyard and take the money...can't have that. They didn't "earn" it!

[Phoebe Loosinhouse]

2. What about his concern about all the equity locked away that Americans

weren't spending? When he encouraged them to take out ARMs long long after any sane person would have given that advice. The balloon was deflating rapidly while Alan was still blowing into it hard.

[amandabeech]

5. Greenspan is speaking for all institutions and individuals who

own U.S. denominated investments, particularly treasury bonds and fannie mae or freddie mac bonds.

They're afraid that the U.S. government will default, or probably more likely, the dollar will fall to very low levels (except against the chinese yuan and other asian currencies that are tied to it), and their treasuries, and all U.S. denominated assets, will depreciate in value against similar investments made in other places with currencies that retain their values.

He's being paid by big bond funds, financial houses and rich individuals, including those outside the U.S.