Alan Greenspan traces housing bubble to collapse of the Soviet Union

[JBoy]

Source: Globe & Mail

Former Federal Reserve Chairman Alan Greenspan, whose legacy has been tarnished by the global financial crisis, on Thursday laid out a scholarly defense of why Fed policy did not fuel the housing bubble.

The fall of the Soviet Union led to hundreds of millions of workers entering the global marketplace, he said in a paper to be presented to a Brookings Institution conference.

This new market-based workforce, Mr. Greenspan said, helped push up growth in the developing world. This in turn fueled a global savings glut that drove down long-term interest rates, leading to an “unsustainable boom” in house prices, he said.

Read more: http://www.theglobeandmail.com/report-on-business/economy/alan-greenspan-traces-housing-bubble-to-collapse-of-the-soviet-union/article1504666/

---

What utter bullshit.

[TerribleLarryDingle]

1. Does any one at all still listen to this no nothing prick?

[cstanleytech]

54. Only those who like to play pretend still, ya know like lets pretend the us government never

tortured anyone or lets pretend its legal because their not citizens not to mention the lets pretend obama isnt a legal citizen and question where he was born or the current popular one of lets pretend the economy did not fail while under the Bush administration and instead blame obama for it all.

[county worker]

2. Nothing about the sub-prime loans becoming securities?

The whole f..king 8 years was nobodies fault.

[roseBudd]

56. I'll go with his Oct. 23, 2008 testimony to congress on the cause...

I use this a lot to shut up the wingnuts that blame CRA

http://blogs.wsj.com/economics/2008/10/23/greenspan-testimony-on-sources-of-financial-crisis/

[RKP5637]

3. It's always someone else's fault, isn't it... never the US. I got so tired of

watching congress kiss this guy's ass when he presented to them.

[av8rdave]

4. If Reagan supposedly gets credit for the fall of the Soviet Union, the housing crash is HIS fault

[Tansy_Gold]

5. GMTA n/t

[No Elephants]

29. It's his fault, no matter what. And, even if it weren't his fault, it would still be his fault.

That's how much that man is at fault.

[Tikki]

46. +>a million

Tikki

[xultar]

6. So Black folk are off the hook and Raygun is on? Y'all know they wanted to blame the shit on us.

[Gormy Cuss]

16. Yes! Reagan is to blame.

I can't wait to haul out this Greenspan assertion the next time I'm in the same room as a Reagan defender.

[FarCenter]

7. The fall of the Soviet Union didn't have anything to do with the 100s of millions of Asian workers

Complete and utter BS.

[pampango]

13. You're right. It was the fall of Mao that did that.

The population of the USSR when it ended in 1991 was 293,000,000, more than the US at the time but no where near the population of China.

[notesdev]

8. Funny

I trace it to Alan Greenspan's deliberate decision to inflate the housing bubble to evade the consequences of the tech bubble that he created.

[Birthmark]

9. Nonsense.

Greenspan knows what happened: Reagan ran the US economy into the ditch. It was only through Greenspan's multiple bubbles and the emergence of the internet that we maintained the illusion of wealth...until the crash.

But make no mistake, it was the Reagan policies that caused this crash. Trickle-down ALWAYS turns out the same way. It's inevitable.

[pundaint]

11. +1

[teknomanzer]

21. Tech revolutions kept us out of the tank...

You are pretty much spot on with that... It was the PC revolution that saved Reagan. His voodoo economics would have been a complete failure if the technological revolution of the PC had not increased global productivity - the sad part is that instead of decreasing the number of hours people work while maintaining the same pay (which would have been ideal) wealthy fucks decided to double their own pay by downsizing. My futurist dream of a shorter work week disappeared in the twinkle of some greedy bastards eye.

When the fuck can we finally accept that supply side economics does not work - except to make the rich even more wealthy? And why don't the Uber-rich understand that this disparity leads directly to social instability?

[Mr. Sparkle]

10. Phew, just as long it was not his fault !

whatever happened to the party of personal responsibility? I guess it went the same way as the party of family values.

[bondwooley]

22. Isn't he about 300 years old? I don't think we need to pay attention to him any longer..

[Arctic Dave]

12. This is starting to look like a kid trying to explain how someone else at the cake

when he has frosting and crumbs all over his face and hands.

[Dappleganger]

14. So since Uncle Ronnie Rayguns brought the Soviet Union down...

it's all his fault, right?

[No Elephants]

41. Ronnie brought down the Soviet Union every bit as much Putin brought down the US last year.

[shotten99]

15. Alan Greenspan is to the economy

what Joe Hazelwood is to the environment.

[florida08]

17. lol

Thanks..need the laugh. Did you know that derivatives can be traced back to Greece? And organized future trading came from the 17th century in Japan? Damn this man is a coward.

[Joanne98]

18. But but but I thought Raygun scared them?

[thereismore]

19. Blame it on the workers. Foreign workers to boot. Not his fault, no no. nt

[UpInArms]

20. omg - this idiot has the weirdest flat-line brain pattern

since Teri Schiavo.

[h9socialist]

23. He's more senile than Reagan was at that age!

Of course what do you expect from a devotee of Ayn Rand? Sanity? NOT A CHANCE!

[Tansy_Gold]

32. He's more senile than Reagan is now. n/t

[h9socialist]

38. I don't know . . .

I detest Reagan so much that I refuse to tour his library when I visit relatives in Los Angeles . . . for fear I'd find the temptation to piss on Reagan's grave to be too much! Best not tempt fate like that!

[Itchinjim]

24. I just KNEW it was a commie plot...

[Blue_Tires]

25. If only he was able to prove ACORN got started in the USSR

everything would come full circle!!:eyes:

[Magleetis]

26. Hey Alan

A shot of penicillin will cure that syphilis.

[on point]

27. Supply side economics is a ponzi scheme that led to asset price inflation

What utter nonsense. The problem occurred because George 'The Liar' Bush encountered an economic down turn *(demand decline) in 2001, he responded with Supply side economic myth.

Despite the fact this was a demand recession. That is, if my factory is running at only 60% I am not going to invest in extra capacity, no matter how nice the tinkle down tax cuts for the wealthy are. Instead I will use my new cash to buy existing assets (too much cash chasing fixed amount of assets leads to inflation).

The supply-side economic lunacy makes no sense from an economic model perspective, nor from an empirical perspective. It is a delusion that republicans still mouth as an axiomatic principle, instead of the worthless dogma it really is.

Greenspan was a believer in this dogma and did his best to pour additional money into the market. The republicans needed the price bubble to make it seem like their policies worked. They kept coming up with ever more ways to kick the can down the road so the rich could cash in and stick the bill with the poor. If they had been able to privatize social security they could have bought another 10 years of fake, frothy markets. But like all good ponzi schemes, when the money stopped flowing in, the ponzi scheme collapsed.

[MisterP]

31. he also argued against regulation because finance was beyond human understanding

he literally worships money (he was one of Ayn Rand's groupies)

[benld74]

28. He's doin 'shrooms man! Only 'shrooms make ya think crazy like that!

[ezmerelda39]

30. Too little too late.......

In this case hindsight is 0/0.

[Doremus]

33. Has any neocon EVER taken responsibility for their fuckups?

The party of responsibility sure doesn't like to accept any.

[DemoTex]

34. Blame it on the Stones.

Might as well.

http://www.youtube.com/watch?v=hjRT-J8dPSA

[2Design]

35. it was his fault but in the ownership admin, he is unwilling to own it n/t

[superconnected]

36. This is so Republican of him.

[aquart]

37. What claptrap.

The greed of his bosom buddies crashed our system.

[awoke_in_2003]

39. the man is senile

[santamargarita]

40. That sounds like something George Bush would say

:crazy:

[No Elephants]

42. Alan who?

[Roland99]

43. O.M.F.G.

:banghead:

[hedgehog]

44. Those tricky Commies just can't be trusted!

[CountAllVotes]

45. this man is insane

time to shut the door Greenie. Best to hang up the keys to the kitty while you're at it!

:kick:

[daleo]

47. I am surprised he didn't blame the South Sea Bubble

Or perhaps the Tulip Craze of 16th Century Holland.

[whosinpower]

48. That is a LIE!

The truth is that the US financial corporations created a whole new series of financial tools, with the help of AIG, insured crap, repackaged it, and sold it as triple A securities, and gambled that when it failed, they could recoup their money faster with the insurance, rather than the old fashioned HONEST way of earning interest on the loans.

The housing boom would of continued except for a LACK OF CONFIDENCE in the securities that were sold.....they were crap. They still are crap. Somewhere, on some alternative reality - this is called fraud. Just because you can insure that crap for x amount of dollars does not make it so. Here is the kicker though - if the home owners could of maintained their jobs - those mortgages would not of been crap.

The russians did not make this so. This is an American made scheme that has brought the world financial markets to the brink of collapse, bankrupted little Iceland who was foolish enough to trust that the securities were what they were led to believe, and has also brought Greece to its knees.

Greenspan....once was considered the wisest man, next in line to God, has now confirmed he is a total complete senile commie fearing pathetic fool.

[Turbineguy]

49. It was those fucking Rooskies!

I knew it! Get Major Kong! Get General Bucky! Fire up the C.R.M. 114 Discriminator! Gee, Stainsy, I sure wish we had one of those doomsday machines!

[Fool Count]

50. Not such a total bullshit really. I would argue that the main reason

the US-led Western capitalist elites hated the Soviet Union so much and were so hell-bent on destroying it
was precisely because USSR's very existence kept hundreds of millions of workers out of the "global marketplace"
and unaccessible to capitalist exploitation. That was like taking money out of their pocket - the biggest affront
possible. All the pontificating about "totalitarism", "freedom" and "democracy' was just a crude propaganda
bullshit in this savage war for hundreds of millions of unexploited workers. Just look at China, which remains
ten times more "totalitarian" than USSR ever was, yet by letting its hundreds of millions of workers to be
taken advantage of by the "global marketplace" unimpeded it is darling of the western capitalists. The fact
that ex-Soviet, Polish, Hungarian, Romanian, Vietnamese and other workers started to send most of their
output to the West getting virtually nothing in return could not but have contributed at least something
to the housing and financial bubbles in the US.

[warm regards]

51. Hmm...kind of sounds like NAFTA on steroids.

[western mass]

52. the only opinion of that f*wit's I'm interested in

is whether he thinks he's a criminal, or just criminally incompetent.

[Festivito]

53. STEP BACK! Do not look the BANKERS in the eye!

It's the poor people not paying their loans.
It's the Democrats getting people to buy homes.
As I said, it's the Soviet Union migration that caused the housing bubble.

It has nothing to do with a Bush SEC lifting all minimum requirements of bank holdings compared to what they lend in April of 2004 in time for the economy to improve before the November 2004 election, and that pesky LW press not reporting the change for FOUR YEARS until October 2008 when Bush could not run anyway and McCain could not be trusted. Just so you know. A bunch of made up money in the form of credit derivatives had nothing, repeat nothing, to do with a bubble of money suddenly appearing in the marketplace of houses, or anywhere else either, let me repeat, not anywhere else either.

Good luck. I got mine. Hope you'll be fine or go away quietly.

[pipoman]

55. Uh, no, I don't buy that crock-o-shite for a moment..

The housing collapse was due to repub. bank deregulation combined with dem lowering of mortgage qualification criteria. What role the fed played other than their usual elite serving policy decisions, I really don't know.

[Owl]

57. LOL. Such nonsense.,

[Lasher]

58. Well I am in a state of shocked disbelief.

Not so much shock. Mostly disbelief.

I guess Greenspan's ready to rationalize away the collosal failure of his libertarian Republican ideology, in contrast with his rare moment of honesty in 2008:

It marks the end of an era. Alan Greenspan, the maestro, defender of the market fundamentalist faith, champion of deregulation, celebrator of exotic banking inventions, admitted Thursday in a hearing before Rep. Henry Waxman's House Committee and Oversight and Government Reform that he got it wrong.

"Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief," he said.

As to the fantasy that banks could regulate themselves, that markets self-correct, that modern risk management enforced prudence: "The whole intellectual edifice, however, collapsed in the summer of last year."

Greenspan spurned the Republican acolytes trying desperately to defend the faith and blame the crisis on the Community Reinvestment Act and the powerful lobby of poor people who forced powerless banks to do reckless things. Greenspan dismissed that goofiness in response to a question from one of its right-wing purveyors, Rep. Todd Platts, R-Pa., noting that subprime loans grew to a crisis only as the unregulated shadow financial system securitized mortgages, marketed them across the world, and pressured brokers to lower standards to generate a larger supply to meet the demand. Private greed, not public good, caused this catastrophe:

"The evidence now suggests, but only in retrospect, that this market evolved in a manner which if there were no securitization, it would have been a much smaller problem and, indeed, very unlikely to have taken on the dimensions that it did. It wasn't until the securitization became a significant factor, which doesn't occur until 2005, that you got this huge increase in demand for subprime loans, because remember that without securitization, there would not have been a single subprime mortgage held outside of the United States, that it's the opening up of this market which created a huge demand from abroad for subprime mortgages as embodied in mortgage-backed securities."

http://www.truthout.org/102508C

[sendero]

59. Revisionism..

... Greenspan allowed his bullshit libertarian ideology to overrule common sense and allowed the bubble to fester for years.

It WAS and IS the Fed's main stated goal to control the supply of money to prevent just such disasters.

He FAILED and no amount of revisionist history will save his fucked reputation.

[Guy Whitey Corngood]

60. When that's debunked then it'll be because of WW 2. nt