Greenspan's Dark Legacy Unmasked - by Stephen Lendman
After retiring as the Federal Reserve's second longest ever serving chairman, Alan Greenspan is now cashing in big late in life at age 81. He chaired the Fed's Board of Governors from the time he was appointed in August, 1987 to when he stepped down January 31, 2006 amidst a hail of ill-deserved praise for his stewardship during good and perilous times. USA Today noted "the onetime jazz band musician went out on a high note." The Wall Street Journal said "his economic legacy (rests on results) and seems secure." The Washington Post cited his "nearly mythical status."
Stanford Washington Research Group chief strategist Greg Valliere called him a "giant," and Bob Woodward called him "Maestro" in his cloying hagiography (now priced $1.99 used on Alibris and $2.19 on Amazon) that was published in 2000 as the Greenspan-built house of cards was collapsing. The book was an adoring tribute to a man he called a symbol of American economic preeminence, who the Financial Times also praised as "An Activist Unafraid to Depart From the Rule" - by taking from the public and giving to the rich.
Others joined the chorus, too, lauding his steady, disciplined hand on the monetary steering wheel, his success keeping inflation and unemployment low, and his having represented the embodiment of prosperity in compiling a record of achievement his successor will be hard-pressed to match.
In 2004, William Greider in The Nation magazine had a different view. He's the author of "Secrets of the Temple" on "how the Federal Reserve runs the country." He wrote Greenspan "ranks among the most duplicitous figures to serve in modern American government (who used) his exalted status as economic wizard (to) regularly corrupt the political dialogue by sowing outrageously false impressions among gullible members of Congress and adoring financial reporters."
They were front and center in the New York Times for the man who "steer(ed) the economy through multiple calamities and ultimately....one of the longest economic booms in history....(He earned his bona fides) weather(ing) the Black Monday stock crash of 1987 (and in 18 and a half years in office) achieved more celebrity than most rock stars" and may now approach them in earnings.
The new book of his memoirs "The Age of Turbulence" is just out for which his reported advance exceeded $8.5 million (second only to Bill Clinton's $10 for his memoirs) plus additional royalties if sales exceed 1.9 million copies. They may given the amount of high-impact publicity it and he are getting nonstop. And that's not all. He's in great demand on the lecture circuit at six figure fees, has his own consulting firm, Greenspan Associates LLC, and his lawyer, Robert Barnett says "virtually every major investment-banking firm" in the world wants to hire him for his rainmaking connections.
They have value, not his market advice, best avoided for the man who engineered the largest ever stock market bubble and bust in history through incompetence, timidity, dereliction of duty, and subservience to the capital interests he represented at the expense of the greater good and a sustained sound economy he didn't worry about nor did Wall Street.
For firms on the Street and big banks, he could do no wrong and was above reproach for letting them cash in big and then get plenty of advance warning when to exit. Most ordinary investors weren't so fortunate. They're not insiders and were caught flat-footed by advice from market pundit fraudsters and the most influential one of all in the Fed Chairman. Just weeks before the market peak in January, 2000, he claimed "the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits and stock prices at a pace not seen in generations, if ever."
It was hype and nonsense and on a par with famed economist and professor Irving Fisher's remarks just before the 1929 stock market crash and Great Depression when he claimed economic fundamentals in the country were strong, stocks undervalued, and an unending period of prosperity lay ahead. It took a world war a decade later, not market magic, for them to arrive, but before it did Fisher kept insisting in the early 1930s recovery was just around the corner. It's the same way Wall Street touts operate today on gullible investors who even after they've been had are easy prey again for the next con.
And they're really in trouble when it comes from the "Maestro," who at the height of the stock market bubble said: "Lofty equity prices have reduced the cost of capital. The result has been a veritable explosion of spending on high-tech equipment...And I see nothing to suggest that these opportunities will peter out anytime soon....Indeed many argue that the pace of innovation will continue to quicken....to exploit the still largely untapped potential for e-commerce, especially the business-to-business arena."
One week later, the Nasdaq peaked at 5048 and crashed to a low of 1114 on October 9, 2002. It lost 78% of its value, the S&P 500 stock index dropped 49%, and retail investors lost out while Greenspan was busy engineering another bubble with a tsunami of easy money for Wall Street and big investors. It's now unwinding as he gets a big payday for his memoirs and a chance to rewrite history. He aims to raise himself to sainthood and at the same time distance himself from the very costly policies he implemented on top of trillions he helped scam in the greatest modern era wealth transfer from the public to the rich. More on that below.
Greenspan's Background and Tenure as Federal Reserve Chairman
Alan Greenspan grew up in New York, got his B.A. and M.A. in economics from New York University and later was awarded a Ph.D. in economics from Columbia without completing a dissertation the degree usually requires. In a highly unusual move, Columbia made an exception in his case.
Early on, he became enamored with free market ideologue Ayn Rand, wrote for her newsletters and authored three essays for her book "Capitalism: The Unknown Ideal." It expressed her views on capitalism's "moral aspects" and her attempt (with Greenspan's help) to rescue it from its "alleged champions who are responsible for the fact that capitalism is being destroyed without a hearing (or) trial, without any public knowledge of its principles, its nature, its history, or its moral meaning."
That was in 1966 when Rand, a staunch libertarian as is Greenspan, believed fundamentalist capitalism was being battered by a flood of altruism in the wake of New Deal and Great Society programs she (and Greenspan) abhorred. She defended big business, made excuses for its wars, and denounced the student rebellion at the time and the evils of altruism. Greenspan concurred, maintained a 20 year association with Rand (who died in 1982), and never looked back.
I am a 72 year old, retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.
Greenspan is the kingpin purveyor of federalism that worked for the Clinton administration in being the voice of a factual testimony to its accumulating assets that brought the country out of years of accumulated deficits; gaining surpluses never seen before since after WWII. That is until the change in guard to the Bush administration that totally reversed the good times toward the bad with the highest in accumulated debt in US history.
One could argue that 911 and the war in Iraq were beyond the control of economic forecasters, but anyone with a gene of common sense is keen to point out that Personalities do make a difference when it comes to leadership and the direction of a country. Could we say President Bush was just unlucky? The truth of the matter is no.
His father was involved in the first military action in Kuwait, with George Jr. having ties to the binLadin family, making them intimate players on the scene in concern to national security if Bush was elected.
We know binLadin was instrumental in military campaigns in Afghanistan, making the relationship to the Bush United States a duopoly to the Military Industrial Complex. Once you start recognizing the over-bearance of MIC in any administration it spells doomsday market pressures.
One could argue the stolen election was the cause to 911, because the dire poor in middle class societies outside of the US would suffer more under a Bush administration causing the disenfranchisement, but the story is not so clear really, when evidence shows clearly 911 was more than hijackers attacking the USA.
Specifically it was a plan to control Oil resources in a region that is quite volatile because there is no nuclear balance in the Middle East. Israel is the only country to have nuclear weapons and this is the threat to Arabs who have none, and can not have control over their own resources.
Yes Alan Greenspan should be ashamed of himself; but in reality the turn of events do prove and show the American people the contrasting realities. In fact Greenspan will come out of this when he admits this, and influences people toward the Democratic principles that led and kept the country out of debt and out of war, which has been their trademark ever since their success in ending the Vietnam War.
Even though a Republican ended the war in Vietnam his resignation proved the hard realities and forces vying on Nixon to uphold the MIC convictions, or support the greater ideology, The Parvenu Paroxysm Ambit.
Republicanism is a party for the minority who are rich supplanting the backbone of America who is really the middleclass. They are never concerned about the country or people, only themselves and how much more control they can have.
But the Democrats who managed to wipe out debt and gain surpluses never seen before; is a living testimony to the fact that working middle class are the folks who are responsible, can manage, have creditability, and are competent in concern to national financial systems. They go the extra mile to prevent the calamity of war. In hindsight it is an admirable characteristic.
I think Greenspan doesn't need the Bernake job to shift markets. His word is gold and wisdom when the time comes for him to compare the Clinton vs. Bush legacies. Anything that indicates helping the middleclass in the markets are winners and movers becoming the driving forces out of the Bush or Republican conundrum.
Greenspan although complicit in supporting the Bush administration after his Democratic term was stolen, his only choice was to try and hold on to slow the impending avalanche or immediately buckle into the pressures leaving an instantly failed Wall street at a time of launching the War. I am sure we remember the words you are either with us or against us. His book certainly tells another tale. But upcoming markets will prove the war was wrong, and is the reason to the downward slide.
Huge markets are developing for secure renewable energy resources, especially environmentally conscious groups. Oil is becoming more of a protected resource due to declining supplies, and Air Pollutional Global Warming Factors. Iraq oil will become conservative reserves, in an attempt to provide long term social stability. They have no other resources, except sand.
It will be worth Associating with Alan Greenspan because his name represents not only financial wisdom but an expansion toward environmental integrity. That is I hope. djermano@yahoo.com
by
Dom Jermano (20 articles, 0 quicklinks, 40 diaries, 934 comments)
on Monday, October 1, 2007 at 9:58:11 AM
everybody's blaming Greenspan. He's merely an economist. He knows about markets and some "rugged individual" called homo economicus but, like most economists, nothing about society, which is what you elect politicians for. Unless, of course, you elect someone like Reagan, who couldn't even spell the word society, and then turn him into a saint.
Face it, folks, you all fell for that Reaganesque BS about government (i.e., "we the people") being the problem, not the solution. Now, you're scapegoating Greenspan.
by
delia (0 articles, 1 quicklinks, 0 diaries, 109 comments)
on Monday, October 1, 2007 at 12:55:31 PM
The root problem is the private ownership of the "Federal" Reserve - the biggest, most expensive, scam in history. Their debt-based money and bond house privateers guarantee our ruin.
Kent Welton,
PublicCentralBank.com
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Kent Welton (46 articles, 0 quicklinks, 0 diaries, 37 comments)
on Monday, October 1, 2007 at 2:21:25 PM
Indeed it is and I wrote about in under the above title. The privatized money creation and control was the bankers' dream and Woodrow Wilson and Congress obliged allow them to pull off the greatest financial heist in history. SS scam the 2nd greatest.
by
Stephen Lendman (199 articles, 0 quicklinks, 0 diaries, 76 comments)
on Monday, October 1, 2007 at 2:48:24 PM
