PAUL KRUGMAN: Sad Alan’s Lament

[kevinmc]

When President Bush first took office, it seemed unlikely that he would succeed in getting his proposed tax cuts enacted. The questionable nature of his installation in the White House seemed to leave him in a weak political position, while the Senate was evenly balanced between the parties. It was hard to see how a huge, controversial tax cut, which delivered most of its benefits to a wealthy elite, could get through Congress.

Then Alan Greenspan, the chairman of the Federal Reserve, testified before the Senate Budget Committee.

Until then Mr. Greenspan had presented himself as the voice of fiscal responsibility, warning the Clinton administration not to endanger its hard-won budget surpluses. But now Republicans held the White House, and the Greenspan who appeared before the Budget Committee was a very different man.

Suddenly, his greatest concern — the “emerging key fiscal policy need,” he told Congress — was to avert the threat that the federal government might actually pay off all its debt. To avoid this awful outcome, he advocated tax cuts. And the floodgates were opened.

As it turns out, Mr. Greenspan’s fears that the federal government would quickly pay off its debt were, shall we say, exaggerated. And Mr. Greenspan has just published a book in which he castigates the Bush administration for its fiscal irresponsibility.........

http://freedemocracy.blogspot.com/2007/09/paul-krugman-sad-alans-lament.html

[whistle]

1. I guess Sir Alan Greenspan would rather be remembered as an idiot than

...then the man who blew up the world financially by creating a system of complex debt and speculative paper IOUs for hundreds of trillions of dollars.

[unblock]

2. the speculative excess had very little to do with the particular form of debt

what, you think bubbles didn't exist before structured financial products?

people were making bad loans. sometimes bad loans default. people who hold the debt took that risk and pay the price. not so complex after all.

if anything, structured products make it easier to shift particular risks to people who are better equipped and more interested in taking those particular risks. it's not the financial product that's the problem, it's the investor taking inappropriate risks and/or not properly hedging that's the problem.

[Demeter]

5. People Were Pushing for Deregulation to Remove Laws Enacted

after the last big bubble (the Great Depression, perhaps you've heard of it?) so they could create a Greater Depression and bring those "Happy Days are Here Again" golden age back.

It is the systematic removal of all the painfully won knowledge (fact and rational response to reality) that I most object to, and Alan was on the front lines leading the charge, Ayn Rand in hand as his bible.

[unblock]

6. i'll agree to that. a lowering of disclosure requirements on the equity side, e.g.

had been a major factor in letting equities issue reports that didn't accurately reflect the risks.

corporations now love to complain about sarbox, but it got at least a few things right, most notably making officers actually sign finanacial statements and be liable for their accuracy.

[pansypoo53219]

3. when you tie your legacy to the chimperor

you are bound to land in crap.

boohoo.

LEMMING!

[bbgrunt]

4. another repuke creates his own reality.

[barb162]

9. He went along with Bush for years and now he tries to deny it.

I cannot stand that man. He did untold harm to the USA doing Bush's bidding.

[barb162]

7. This is a great article showing Greenspan to be a hypocrite

and a liar and not a friend of the average American.

[barb162]

8. kick

[barb162]

10. And kudos yet again to Paul Krugman for setting forth the lies and BS.