Thursday, October 23, 2008

Greenspan reconsiders.

The US economy is pretty much in the crapper these days for a variety of reasons, including (but not limited to):
  • increasing wealth going into corporate profits rather than wages since the '70s
  • banks and lenders being reckless when giving people mortgages and loans
  • rampant deregulation letting The Market somehow fuck itself in its own ass
I'm not sure how the last point would be accomplished in any kind of way that wouldn't result in some kind of personal injury, but I think we're all pretty sure The Market has been able to do it. Hell, even Alan Greenspan himself expressed his surprise at a Congressional hearing today at how badly The Market regulated itself, calling the current financial clusterfuck "a once-in-a-century economic tsunami."

(Too soon?)

Anyway, some other Greenspan nuggets (from this original article):

I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.

I have found a flaw [in his free-market ideology]. I don’t know how significant or permanent it is. But I have been very distressed by that fact.
Reply by Rep. Al Waxman: "In other words, you found that your view of the world, your ideology, was not right, it was not working."
Absolutely, precisely. You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.

The problem here is something that looked to be a very solid edifice did break down. And I think that, as I said, shocked me. I still do not fully understand why it happened.

The emphasis is mine on that last little bit, for a reason: If Alan Greenspan, noted economist, long-time Chair of the US Federal Reserve — that is to say, someone who knows a fucking hell of a lot about economics — doesn't fully understand what the shit happened... well, to quote Col. Mandrake in Dr. Strangelove, "Well, I would say, sir, that there were something dreadfully wrong somewhere."

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