The U.S. financial system on its knees

[flashl]

By Gretchen Morgenson

NEW YORK: It's dispiriting indeed to watch the U.S. financial system, supposedly the envy of the world, being taken to its knees. But that's the show we're watching, brought to you by somnambulant regulators, greedy bank executives and incompetent corporate directors.

This wasn't the way the "ownership society" was supposed to work.

Investors weren't supposed to watch their financial stocks plummet more than 70 percent in less than a year.

And taxpayers weren't supposed to be left holding defaulted mortgages and abandoned homes while executives who presided over balance sheet implosions walked away with millions.

Over the course of this 18-month financial crisis, we have lurched from land mine to land mine.

...

Now it looks as if the bill for that largess is coming due. Of course it will be borne by the usual bag holders: U.S. taxpayers. You and me.

...

"The real outrage is that none of this had to happen," said William Fleckenstein, co-author of "Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve" and president of Fleckenstein Capital in Issaquah, Washington. "We did not have to ruin the financial system and ruin the financial lives of a huge chunk of the middle class in the United States.

IHT

[jody]

1. Not to worry, the system will survive as long as the Fed can continue to print money.

:sarcasm:

[tanyev]

2. Oh, I think it's exactly how the p3wnership society was supposed to work.

It's just not how they said it was going to work.

[indepat]

3. Proud to reiterate my often proclaimed mantra: Greenspan, a name which will live in infamy, the

creator of massive bubbles, the supporter of junior's wholly irresponsible fiscal policy and grossly unfair tax policy leading ultimately to multi-trillion dollar raids on the mythical lock box, but diabolically the major architect of the scheme for massive refunding of the social security system whereby many, if not most, middle class taxpayers would sending 7+% more to Uncle Sam than the most affluent and now will probably not get their full social security benefits because the lock box will mostly have been downloaded to the most affluent via junior's tax cuts. See, this will have been a masterful multi-trillion dollar heist of the public's future social security benefits, but nobody, almost nobody, seems to give a shit so why should the writer? Notwithstanding, remember where you heard: Greenspan, a name that will live in infamy and maybe some day a few more people will wake up and realize why Greenspan is so richly deserving of this moniker. :D

[unblock]

4. on the other hand, greenspan sounded the alarm about the government paying off ALL its debt!

thank god we don't have THAT problem to worry about

:sarcasm:


seriously, i think greenspan did to himself in that moment the same thing sandra day o'conner did to herself when she voted in bush v gore. whatever positives they had about their reputation prior to those critical moments were completely overturned by the most ludicrous of decisions.

o'connor was the first female justice and, though overly conservative, not entirely unreasonable on at least some of her decisions (i.e., not a scalia-clone). but you just can't call someone reasonable when they do something so ridiculous and idiotic like bush v gore.

similarly, greenspan had a good reputation (not necessarily well-deserved) primarily for being fed chairman when clinton fixed the economy. again, though, you just can't take a guy seriously when he cries about the sky falling at the prospect of the government running a small surplus, as if we were in such great danger of actually retiring the ENTIRE national debt and THEN what would we do. the mind boggles not only at how anyone could think that was a realistic problem, but also that, should the event actually arise, that no one could possibly think of a solution.

[many a good man]

5. Absolutely agree

He's the most overrated political figure in the past 50 years, including Reagan. Scrutiny shows he was the prime enabler of the meltdown of our economy over the past 25 years. Read Ravi Batra's Greenspan's Fraud if you want a detailed account of why the Greenspan name should live in infamy.

[Adsos Letter]

6. Jefferson

"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:357