The Greenspan Book

Posted by ivb
September 15, 2007

Excellent post Karen.

Greenspan was another who was above question, but the moment Bush got into office I saw a change in his direction. It seemed as though he had been waiting for a Republican and now everything was really going to be wonderful. Your last sentence says it all -- Why did he wait until he had an $8.5-million book deal to tell us this?

The moment Bush started his first campaign, he began to talk about the economy that was going into a slump -- when it had been perfectly fine. He talked over and over about how bad the economy was becoming, until that became truth. After all, he was an MBA from Yale and a guy you would like to have a beer with. The economy now is in a far more precarious state. Greenspan did nothing to stop any of this. I am not interested in his tiny mea culpa.

Posted by Elvis Elvisberg
September 15, 2007

Very good post, Karen. Thanks.

A Democratic president balanced the budget. When the Republicans had all three branches of government, we ran up the largest debt in the history of world finance.

Seems like the GOP's reputation for fiscal conservatism belongs in the rubbish heap with their reputation for seriousness about national security.

And add Greenspan to the other Bush administration Profiles in Cowardice, explaining how senseless everything they've done has been once they're done enabling it. Colin Powell (or Larry Wilkerson, at least), Paul O'Neill, George Tenet, Christine Todd Whitman...

Six years late, a trillion dollars short, buddy. Join Tony Blair, David Petraeus, and the American people. We all have woken up with the fleas.

Posted by Hoplite
September 15, 2007

"But Greenspan presided over the Fed for another five years. So it seems fair to ask: Why did he wait until he had an $8.5-million book deal to tell us this?"

----------------------

For some of the same reasons Colin Powell w h o r e d himself out for the Iraq war, and then made (muted, considering the circumstances) criticisms of Bush after he was forced out at State. For that matter, for the same reasons you and most of your gang spent years kissing Bush's a s s, while those few of you who weren't puckering up said nothing, when it was obvious to all of you that he was in over his head, and was doing things you disagreed with.

Why ask questions when you already know the answers? Do you see yourself as some sort of Socrates of the press corps?

Posted by ivb
September 15, 2007

I disagreed with Elvis on his blog post on Greenspan about including Paul O'Neill in the list including Powell, Tenet, and Whitman.

O'Neill was appointed in 2001 early in the first term and resigned in 2002. He immediately spoke out against the administration policies.

Unlike Greenspan the enabler. I look forward to the deep and incisive questions he will be asked on his coming book tour.

Posted by Joe Klein's conscience
September 15, 2007

What would you expect from a disciple of Ayn Rand? Wasn't she all about selfishness?

Posted by Greg VA
September 15, 2007

"Why did he wait until he had an $8.5-million book deal to tell us this?"

I expect nearly everyone who ever lifted a finger to help George W. Bush will write a book to try and salvage their reputations after this train wreck of an administration. And if they can make a buck doing it that's just a bonus.

Greenspan is attempting to rewrite history to minimize his role in enabling our Boy King's disastrous economic policies. Greenspan turned his reputation over to an amiable fool, and I'm not at all surprised that he's trying to get it back.

Posted by Beth in VA
September 15, 2007

Tumulty shows her journalistic independence in this post! Excellent!

Posted by Riesz Fischer
September 15, 2007

Karen!

"But Greenspan presided over the Fed for another five years. So it seems fair to ask: Why did he wait until he had an $8.5-million book deal to tell us this?"

Yes, that is a fair question.

Posted by Anonymous
September 15, 2007

this author has no knowledge whatsoever on how the US economy works..

Posted by the KOS KIDZ
September 15, 2007

SOON HILLARY WILL BALANCE THE BUDGET AGAIN BY ENDING ILLEGAL WAR AND DOWNSIZING THE ARMY AND RAISING TAXES ON THE RICH!!!! IT IS TIME THEY DID THEIR SHARE FOR THE COMMON GOOD!!

Posted by Anonymous
September 15, 2007

This is almost too funny.
Especially the "I am darfurious at the genocide in Sudan bit."
You moonbats are at least entertainment if not good for much else.

http://littlegreenfootballs.com/weblog/?entry=27043_Peace_Fetishists_With_Lots_of_Money_to_Give_Away&only

Posted by Elvis Elvisberg
September 15, 2007

ivb-- you have the better of the argument on O'Neill. He didn't call a press conference while Treasury Secretary and say, "these guys are a bunch of idiots," but that might be an unreasonable expectation on my part. My including Goldsmith was way off base-- he fought against Yoo's evil lawlessness while he was there.

Hoplite-- "the Socrates of the press corps". I still think this is a good post by Karen, but there's no way around the fact that that is hilarious.

It'd be great to see a well-reasoned defense of Greenspan's Bush-era record on this thread.

Or some all-caps foolishness and links to littlegreenfootballs screeds that have nothing to do with anything. Whichever you guys are capable of.

Posted by doug
September 15, 2007

Its great we can read this on the web quickly, so we don't waste our time on the book.

Greenspan should run for president since he knows everything after the fact.

Posted by Roger
September 15, 2007

So who do you blame for the current mess – Greenspan, Bush, or the press? What about Cheney? Is it a secret that Cheney is really running the country? In 2004 (or after he shot that poor guy in the face), why didn’t the Republicans replace him with someone that would be electable in 2008?

Posted by linda
September 15, 2007

Is the cover for the Greenspan apologist epistle contained here ['Trickle Down Deficit' or 'Rob'n the Hood'], maybe:

http://politicalhumor.about.com/library/images/blbushpictures.htm

How I picture the 'W' library:

A replica of the Super Dome with a Mission Accomplished Banner hanging over the Grand Entry featuring a statue of Bush sitting in a very large chair reading 'My Pet Goat' to Barney with Laura looking on. This will lead to a larger-than-life photo op Hall of Smoke and Mirrors with free copies of talking points and bumper sticker slogans. In the center will be a gigantic structure resembling a bomb shelter guarded by a brigade of Marines draped in Old Glory with a vault door labeled 'Executive Privilege'. As one is leaving there will be two free standing Barnes and Nobles. One will sell all the Mea Culpa But books, Bush Bound Commission Reports, and Lessons Learned Analysis from the Cabinet Secretaries assistants. The other will sell all books related to Fiasco and Real Science. All proceeds to go to reduce the debt and rebuild the infrastructure.

A special NCLB area will be designed to entertain the children while the parents 'go shopping'. They can go down the Rabbit Hole to play such games as Whack-a-Mole and Find the WMDs.

Posted by sentinel
September 15, 2007

Karen: a good summation. Greenspan is late with his mea culpas. Just a thought: was he worried his wife, NBC's Andrea Mitchell, might have problems with the WH if he did not play ball? Seriously, have we not a trend: Powell, Greenspan, assorted Generals and Cabinet Ministers, Senators: a long list of individuals who lacked the courage to stand up to the President.

Posted by p_lukasiak
September 15, 2007

"So who do you blame for the current mess – Greenspan, Bush, or the press? "

In this case, Greenspan.

Greenspan is (rightfully) given a lot of credit for forcing Clinton to practice fiscal discipline --- Greenspan essentially went to Clinton and said that interest rates would not go down (and economic growth occur) unless Clinton restrained spending and took control of the budget deficit.

But Greenspan refused to force Bush to practice fiscal discipline in the same way -- cutting interest rates twice in the first four months of 2001 despite Bush's efforts to inflict his massive and senseless fat cat tax cut on the federal budget. Greenspan not merely went along with Bush's disasterous tax and budget policies, these Fed rate cuts were particularly ill-timed, because there was both a surplus of "product" and overcapacity in the production sector when those cuts were made --- "high interest rates" was not the problem, and "lower interest rates" were not the solution, when those rate cuts were made.

In other words, give Greenspan credit where it is due (for his role in the Clinton economic miracle) and blame where it is due (for his even larger role in the Bush economic disaster).

Posted by p_lukasiak
September 15, 2007

"My including Goldsmith was way off base-- he fought against Yoo's evil lawlessness while he was there. "

Elvis, Goldsmith belongs on that list --- all that Goldsmith fought was the ILLEGAL aspect of what Yoo was promoting. Goldsmith himself supported the same EVIL goal, he just wanted to achieve those goals within a legally supportable framework.

Posted by Tom
September 15, 2007

Since Bush inherited the Clinton recession, the United States of America has had over five booming years of the booming Bush boom. How long will the booming Bush boom continue to boom and boom and boom? Also, with the booming Bush boom producing record tax revenues following the tax rate reductions in 2003 and also producing increasingly smaller and smaller deficits, why would the useful idiots at the New York Times, in writing about Greenspan's book today, allege (falsely) that the United States is experiencing "deeper and deeper deficits"? Are the socialists at the New York Times that stupid or are they merely incapable of discerning reality from their leftist utopian dream?

Posted by p_lukasiak
September 15, 2007

Tom, try taking an english comprehension course. The Times did not say that the America "IS EXPERIENCING 'deeper and deeper deficits'". Here is what the Times article actually says...

"Mr. Bush, [Greenspan] writes, was never willing to contain spending or veto bills that drove the country into deeper and deeper deficits, as Congress abandoned rules that required that the cost of tax cuts be offset by savings elsewhere. "

"was never willing"...."abandoned"...

Its called "past tense". Look it up.

Posted by magisterludi
September 15, 2007

Tom- quit messing with your medications.

Posted by Tom
September 15, 2007

p_lukasiak is such a master(de)bater...

Posted by Peter
September 15, 2007

Greespan came out in favor of the DISASTEROUS tax cuts and eventual record deficits at the behest of the WH. Greenspan kept interest rates artifically low so as not to jepordize the re-election of George Bush Jr. as with Sr.
Seems George Bush not only controled Justice through Gonzales but apparently the Fed through Greenspan.
Write the book and try to recover your credibility while we have to live with the consequences. What could the last 7 years have been with Al (lock box)Gore as president?

Posted by the KOS KIDZ
September 15, 2007

IF AL GORE HAD NOT HAD HIS ELECTION STOLEN BY THE DISENFRANCHISMENT OF THE NOBLE AFRICAN AMERICANS OF BROWARD COUNTY THEN THERE WOULD HAVE BEEN NO 9/11, NO AFGHANISTAN, NO IRAQ, NO HALLIBURTON, NO GLOBAL WARMING, NO KATRINA, AND NO MORE TERRORISM, AND THERE WOULD HAVE NOT EVEN NEEDED TO BE A KOS TO TRY TO RIGHT ALL THAT IS WRONG.

Posted by nemo
September 15, 2007

"p_lukasiak is such a master(de)bater..."

There is how a 10-year-old gets out of an argument he is clearly losing. Be sure to knock over the checkerboard while you're at it.

Posted by flounder
September 15, 2007

Why did he wait until he had an $8.5 million dollar book deal to tell us this? It's easy, he loves money more than he loves his country. Plus he's a coward.

Posted by William A. Franklin
September 15, 2007

In the late 1990s, we had the tech boom and bubble which drove the economy and politics to a great measure. Interests were historically low but not out of sight downward. Then, the bubble burst and we had a 2001-3 downturn, recession, whatever.

The solution, not spoken but hidden economic and political BS, was simple: given the loss of industrial strength to offshoring and corporate taxes, liberate the equity in the US residential housing stock! And, they did, with a vengence. They put the interest rate on the floor and kept it -- overly long--in direct support of the 2004 and 2006 elections.

The mortage mafia, from top to bottom went nuts and constructed loans and loan securitization schemes which we can only think was/is mad. And the pressure continued - and Greenspan (an idiot in my view) played the game for Bush and Repubs. Well, once they had extracted lots of equity from the rubes, who promptly made piggy banks of their houses-or credit cards and it was apparent the subprime (unsecured) loans, once resold in slices, were toxic -- and were mixed with good loans in the same packages -- the music stopped.

And, Greenspan, the Gnome from Hell had vanished. Now, in January-March 2006 (same time Greenspan left), the Fed stopped publishing M3, an indicator of all the currency in circulation--and ran the Bureau of Engraving presses harder than usual -- in large part to help pay for Iraq but also to try to extend the so called debt driven Bush recovery -- add all that to the debts and deficits. You can bet Greenspan was behind the move and that he totally supported Bush.

I had read 15 years ago Greenspan was an acolyte of Ayan Rand - I think she was truly mentally ill - who wrote adolescent fiction having escaped from Russia as the tale goes. I found that really depressing.

Bottom line: The Fed manipulated interest rates to provide ready access to residential housing equity as a means to boost the economy, get it out of the 2001 downturn and sustain Bush with all his inanities and insanities thru the 2004-6 elections, The end was readily apparent in 2004 or so to a casual observer not caught up in the fray. Dont tell me the Fed is not political.

Posted by JoyousMN
September 15, 2007

The great economist Alan Greenspan: I could forgive him for being a Bush toady, but this is the guy who advised the country to buy ARM's when interest rates were at 40 year lows AND it was obvious that the housing market was in a huge bubble.

The man should burn in hell for doing so. Not everyone is economically savvy. They don't have the time, energy or perhaps even the intellect, so they rely on "experts" like Greenspan. And he led them over a cliff.

I say again, he should burn in hell. I wouldn't buy his book for any reason.

Karen, your last sentence was right on. Will you be typing something similar in the dead tree edition?

Posted by linda
September 16, 2007

May I redirect you to AMC's post about Hil-Clark to the comment by 'amjoe'. Just in case you didn't go there. Great collection of Mellon-Hoover-Harvard Economic Society, Coolidge, Forbes and others 'quotes from the crash'.

Posted by Charley Marsteller
September 16, 2007

Let's bring back tar and feathering!

Posted by the KOS KIDZ
September 16, 2007

IF WE RAISE SOME TAXES AND IMPEACH SOME NEOCONS WE CAN FIX ALL OF THIS!!!

Posted by Anonymous
September 16, 2007

My goodness! Does it surprise anyone that Greenspan would turn on his Republican sponsors? He is the ultimate Washington sycophant who has a reputation far beyond his accomplishments, and who has done actual harm to the economy multiple times. What he has written is an attempt to absolve himself of any responsibility for what comes next, while keeping a promise he made to his Clintonite wife to buttress the Clinton legacy.

Calling it sickening would be a compliment.

Posted by Sean Brodrick
September 16, 2007

Excellent piece, Karen. You hit the nail on the head.

Alan Greenspan, or “Mr. Bubble” as we call him in the markets, is partly responsible for the mess that many homeowners find themselves in. He gave explicit endorsement to Adjustable Rate Mortgages (ARMs) and the other crackpot financing schemes that drove the housing bubble to new heights and enabled many Americans to buy more home than they could afford.

From a USA Today story published February 2, 2004:

WASHINGTON — Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.
[snip]
While borrowers can refinance fixed-rate mortgages, Greenspan said homeowners were paying as much as 0.5 to 1.2 percentage points for that right and the protection against a potential rate rise, which could increase annual after-tax payments by several thousand dollars.
He said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs. Those savings would not have been realized, however, had interest rates shot up.
"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage," Greenspan said.

You can go read the whole thing yourself here: http://www.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm

Posted by Tim Connor
September 16, 2007

Mr. Greenspan is a disappointment. Clearly, he doesn't like to admit mistakes (he hasn't now), and he only brings it up in return for money he doesn't need. In addition, it is clear that he valued the Republican prejudices absorbed as a young man over his professional judgement. Thus, his unequivocal endorsement of the stupidest tax cut in American history.

The 45%+ drop in the value of the dollar provides a good insight into what a sharp idea THAT was.

The sad part is --he was probably still better than Bernanke --who appears to be basically clueless.

Posted by MedusasEyes
September 16, 2007

A movement among Europe's judicial communities is growing to try the Bush Administration for war crimes in Iraq before a War Crimes Tribunal at the Hague in the Netherlands. Mr. Greenspan's most belated rendering of worn out observations seems weary and strangely manipulative at this juncture. The problem with this whole administration and all its tenacles is that they WERE playing a simple game of checkers with energy, while Russia taught Venezuala, Nigeria, Equador, Bolivia, Congo, Iran, and Iraq to play played chess.
So oil is $80 a barrel. $80 to someone else. Not you, not I, but to Bush people, whom Greenspan surely can summon the wisdom in his vast resources of expertize, to eternally avoid, in politics, and in BUSINESS.

Posted by Phil Linehan
September 16, 2007

Why on earth has Greenspan waited to speak out now? Should he not have done so when he was part of the Bush gang? I wrote the following when he left the Fed.

Alan Shrugged or A Farewell to Federal Reserve Chairman Greenspan

How we hung upon his every word,
to doubt him would have seemed absurd.
It was Greenspan who always knew the score,
he admonished us that less was more.

He taught a lesson that we all had learned,
a penny saved is a penny earned.
To surpluses he was enthralled
while deficits left him appalled.

In his reprimands we found no blame;
we thought Prudence was his middle name.
Then a sudden, stunning, change took place
which of the cautious banker left no trace.

The man whom some had called a Scrooge
had morphed into a Bush’s stooge.
A switch made, perchance, with a magic wand?
Or, shocking thought: had we all been conned?

Tax cuts, he said, were surely good
as he donned the cloak of Robin Hood.
Alas, no thought he gave the needy
for his concern was for the greedy.

When accused of having done the dirty
his attitude become quite shirty.
He said he’d never heard such rot
for one always gives to those who’ve got.

He admired the teachings of the famed Ayn Rand,
whose philosophy he revered as grand,
that the poor among us are immune to pain
so the hindmost is the Devil’s gain.

The solid greenback, once so prized,
is now funny money, much despised.
Can it be really true that he was heard to holler
“Andrea, Hon, guess what? I’ve shrunk the dollar!”

Posted by MedusasEyes
September 16, 2007

Greenspan releasing a book at this point reminds me of the jumpers off the Titanic swimming franticly AWAAAAAAY from the suction.

Posted by NYT
September 16, 2007

Greenspan is surely the most political Fed Chairman in recent history.
Let's not forget how he increased rates by a full point in the year 2000 including a 50 point increase in May 2000 when the economy was already clearly slowing.

Then as soon as his boy Bush is elected he reverses course on rates, tax policy, deficit policy etc etc. He runs the most reckless, inflationary regime in recent financial history

With his boy Bush safely re-elected in 2004 Greenspan immediately gets to work lifting rates again.

Posted by chris
September 19, 2007

Hey KOS KIDZ
Can you show us how the war is illeagle? I've read the constitution and it gives the Federal Government the "right to use deadly force to achive it's goals". Your ignorance is the very reason I believe we need to have voters take an history/economics test before you're issued a voter's registration card. Do us all a favor, and don't leave your house (or government provided housing) on election day.

Posted by Phil Linehan
October 8, 2007

A Penny Saved is a Penny Spent –
by Someone Else!

By Phil Linehan

When I was young and pocket money was doled out
my parents left me in not the slightest doubt
that the road to happiness was paved with the pennies I saved
instead of spending them on the goodies that I craved.

Dickens’ Mr. Micawber got many a mention
as time and again it was brought to my attention
that if I kept my pennies safe and sound
they would very quickly become a dollar and even a pound.

If only I learned to save my money
I would soon be having my tea with honey.
Could I put it in a pillow under my head?
or perhaps keep in a box stashed under my bed?

No, in a local bank I should put my dough
where I could watch it steadily grow and grow.
If I left it there for quite a while
I’d wake up one day to find it had become a pile.

It was on banks, they said, I could depend
because, if they were asked for money, including mine, to lend,
they would carefully check every single reference
and only to the safest borrowers would they give preference.

I was also told that instead of banks
I could always go and join the ranks
of those who placed their hard earned cash in trust
to companies that never could go bust.

They meant, of course, the mortgage lenders
who would be my savings best defenders.
They would refuse to give out any loan
to anyone who did not collateral own.

As the building societies would look after every single cent,
I was assured that I could rest content.
So, acting on the advice of those who knew
I deposited my humble savings without more ado.

Admit, I must, that I at times regretted
not having occasionally become indebted
to buy that very special treat
that would, I thought, have made my life complete.

But my feet on the ground were firmly set
and I was glad I had not got into debt.
I pitied those who kept on spending
on a spree that seemed to be never ending.

They wanted a house of their very own
to acquire which they would need a loan.
When they told the banker they hadn’t got a dime
he said not to worry, they are what are called sub-prime.

What does that mean, one might well inquire.
That those whose finances are in straits dire
can borrow like there is no tomorrow,
a practice that can only lead to sorrow.

The day came, as expected, when they could not repay
the cash with which they had been making hay.
What I did not know, I must recognize
is that I was among the duped fall guys.

The returns to which I believed I had a right
very soon began to fade from sight.
My bank was handing on a well polished plate
my savings to the profligate.

How could that happen, one can only query.
Did not those in charge become quite leery
when it was clear things were getting out of hand,
and decide that someone would have to take a stand?

No, not at all, said Fed Chairman Bernanke,
as the lenders kept on playing hanky-panky.
He could, like his predecessor, cut interest rates even more
as our savings kept flying out the door.

So the savers who can be called meticulous
are rewarded by interest rates that are ridiculous.
When they see how the dollar continues to get thrashed
they wonder if those at the helm are constantly smashed.

Thus, the lesson to be learned by all who save
as Mr. Micawber keeps spinning in his grave,
is that to those we entrusted our cash we should give no thanks,
as Greenspan is in Europe to count his euros, pounds and, of course, Swiss francs.

******
You must excuse me now while I seize the chance
To buy a sturdy mattress made in France.