OpEdNews Op Eds

Greenspan's Testimony: Two hours of buck-passing

By (about the author)     Permalink       (Page 1 of 1 pages)
Related Topic(s): ; ; ; ; , Add Tags Add to My Group(s)

View Ratings | Rate It

opednews.com Headlined to H3 4/9/10

Alan Greenspan's performance before the Financial Crisis Inquiry Commission was a real Oscar winner. At no time, was the ex-Fed chairman in trouble, and he was able to showcase the full repertoire of fake emotions for which he is renowned. He was alternately condescending, professorial, combative, engaging, and acerbic. It was vintage Greenspan from start to finish; the tedious jabber, the crusty rejoinders, the endless excuse-making. At 80, Maestro still hasn't lost his touch. No one laid a glove on him, which is precisely the problem.

It's galling that, after everything that's taken place, Greenspan is still treated like royalty; still given a platform so he can run-circles around his critics and make them look like fools. That's not what the public wanted, another playful sparring-match with Chairman Flim-flam. They wanted to see him grilled, interrogated, badgered, threatened and humiliated. And they want to see some trifling sign of remorse for the ruin he's brought on the country. But there was no remorse; no restless squirming, no flickering look of self-doubt, no sudden outburst of regret. Nothing at all. Just the brazen buck-passing of a self-admiring old man trying to pluck his reputation from the ashheap.

No one person is more responsible for the financial crisis than Alan Greenspan. He can say whatever he likes, but the 8.5 million people who spend their days shuffling in unemployment lines, have him to thank. And that's doubly true for the 300,000 families who lose their homes every month or the millions of people now scrimping by on food stamps. They can blame Maestro for the mess they're in.

In his testimony, Greenspan blamed subprime securitization, Fannie Mae and Freddie Mac, the fall of the Berlin Wall, too much saving in China etc. etc. etc. Everyone is to blame; everyone except Greenspan that is, the Teflon Fed chief.

Greenspan claims he never saw the housing bubble. It's a familiar refrain which goes something like this: "Bubble?" "What bubble?" "Who saw a bubble?" "Who said anything about a bubble?" "What could we do?" "How could we stop it?" "Who could have known?"

But then in the next breath, he admits he saw the bubble, but didn't think he could persuade congress to do anything about it. Go figure? Here's the quote:


GREENSPAN: "In that midst of period of expanding home ownership... Had we said we're running into a bubble and we'll have to start to retrench, Congress would say, we haven't a clue what you are talking about."

Interesting, isn't it? Greenspan has so many excuses, he let's the committee decide which ones sound believable. It's like an exam that's "multiple choice." And, notice how he shifts the blame onto congress now. Where's your pride, man?

The best exchange of the day was between Greenspan and Brooksley E. Born, the former commodities regulator who tried to stop Greenspan and Co. from deregulating derivatives, but ultimately failed. Born lost the battle and eventually her job. Here's an extended clip from the hearings which shows Greenspan's support for the lethal financial instruments which triggered the crisis.

Brooksley Born: "In your recent book you describe yourself as an outlier in your libertarian opposition to most regulation. Your ideology has essentially been that financial markets, like the OTC derivatives market, are self regulatory and that government regulation is either unnecessary or harmful. You've also stated that, as a result of the financial crisis, you have now found a flaw in that ideology.

You served as chairman of the Federal Reserve Board for more than 18 years, retiring in 2006, and became, during that period, the most respected sage on financial markets in the world. I wonder if your belief in deregulation had any impact on the level of regulation over the financial markets in the United States and in the world. You said that the mandates of the Federal Reserve were monetary policy, supervision and regulation of banks and bank holding companies, and systemic risk. You appropriately argued that the role of regulation is preventative.

But, the Fed utterly failed to prevent the financial crisis.

The Fed and the banking regulators failed to prevent the housing bubble. They failed to prevent the predatory lending scandal. They failed to prevent our biggest banks and bank holding companies from engaging in activities that would bring them to the verge of collapse, without massive taxpayer bailouts. They failed to recognize the systemic risk posed by an unregulated over-the-counter derivatives market and they permitted the financial system and the economy to reach the brink of disaster.

You also failed to prevent many of our banks from consolidating and growing into gigantic institutions that are now today too big and/or too interconnected to fail. Didn't the Federal Reserve system fail to meet its responsibilities failed to carry its mandate?"

Greenspan replied, "The notion that somehow my views on regulation were predominant and effective at influencing the Congress is something you may have perceived. But it didn't look that way from my point of view."

So, Greenspan expects us to believe that the reason he refused to regulate the OTC derivatives markets, was because no one would have paid attention to him? Is that it? That the congress would have regarded "The Greatest Central Banker of all Time" as some piddling, paper-shuffling bureaucrat who could be dismissed with a wave of the hand? What nonsense. What a shameful, cowardly man. Instead of regret or contrition, all he thinks about is covering his ass.

 

Mike is a freelance writer living in Washington state.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

Go To Commenting
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles
Related Topic(s): ; ; ; ; , Add Tags

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Class Warfare Scoreboard -- Guess Who's Winning?

Newt's Victory: Was it a "Surge" of popularity or faulty voting machines?

Is Fukushima's Doomsday Machine About to Blow?

Troublemaking Washington: Pushing Ukraine to the Brink

Dominique Strauss-Kahn was trying to torpedo the dollar

Unraveling the Welfare Safety Net - Europe Moves Closer to Banktatorship

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
1 people are discussing this page, with 1 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)
Yeah if Greenspan, would have voiced any concerns,... by marko polo on Saturday, Apr 10, 2010 at 9:16:17 AM