Greenspan credibility goes to zero.
Posted on December 13, 2007
It’s too bad when someone who should be emerging as a wise and learned man after seeing and being part of so much in the last couple of decades basically melts down into an incoherent set of denials and finger-pointing.
Because papers like the WSJ and NYT feel honored to have famous people like Greenspan publishing their thoughts and opinions they run the stories. In the rush to sell his book and paint a picture of himself as some a noble victim of the crisis is absurd.
Here is someone who should have some honor, be committed to the truth and provide some real value in the form of knowledge and experience. That’s the character sorely needed in our leaders that seems in scarce supply.
Anyone really trying blame Greenspan is irresponsible as well. There are many factors to consider and at the time the lower rates were not doing much stimulating. Greenspan made a famous statement about the US Economy when rates were low and still declining to the effect that: To not invest in the US now is to believe that the country would not grow economically with 0% interest. Now that made it clear he was about growth at any and all costs. But even then he was still arguing with people who felt that the growth wouldn’t come.
The asset and real-estate bubble were consequences of that and the abandonment of any standards in the doling out of the free money to anyone who was willing to borrow the money. Homes and automobiles became basically free given the financing terms.
Greenspan could be useful if he would help us understand what really should be done at this point. How deeply should we "bite the bullet" and force write-downs and workouts on portfolios? How much should the Fed do now? His insights would be helpful but they have to start with reality and accountability.
Like others who have read and commented on the sad state of Greenspan these days we’re disappointed and exasperated by his character meltdown.
– Kris Tuttle
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Greenspan is an easy target for people who should be blaming themselves. The reality is the fed has little control anymore. Greenspan mentioned this in his editorial yesterday and I think it is true.
When things are going well, no one wants the government messing about in their business. When things aren’t going well, then suddenly everyone becomes an interventionist. You can’t have it both ways.