Palace guard revolt

You know things have gotten serious when even the LA Times is willing to take a chunk out of Alan Greenspan's haunch:

More important -- and, again, missing entirely from Greenspan's explanation of the roots of the crisis -- why did the Fed maintain such a wildly easy-money policy from 2002 to 2004, when the central bank’s benchmark short-term interest rate was no higher than 2.25% the entire period (and was below 1.75% for most of that time)?

Without cheap money, the credit-market bubble could never have reached the epic size that it did.

Greenspan must know this. Admitting it, however, apparently still is a bridge too far for him.

It's nice to see this in print, even if it is just in the LA Times blog.  Even so, "a bridge too far" is a serious understatement; Greenspan has continued to defend his subservient eagerness to prop up the economy artificially under Bush, leading directly to the housing bubble, and will no doubt still be doing so even as they're closing his casket lid:

"You raised rates in 2004. But only after you held interest rates at historically low level for three years, while the bubble, the housing bubble was forming," Stahl points out. "And that you had 13 rate cuts in that period of time."

"It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low," Greenspan explains.

But some of the Fed governors who worked with Greenspan at the time are now saying that they think interest rates were too low for too long.

"I think they were mistaken," Greenspan says.

Yes, who could predict that if you (personally) held interest rates at historic lows for years at a time people would stop saving, load up on credit card debt, and buy houses they couldn't afford (and that that would lead to a meltdown in the housing market)?  Especially after it stopped being a matter of predicting it and merely required observing it?  Not Alan Greenspan, apparently.

In fact, in perhaps the most mind-bogglingly reflexive display of cognitive dissonance I've ever seen, Greenspan was pimping ARMs back in 2004:

Indeed, recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade ...

Understand this very clearly: this is Alan Greenspan saying in 2004 that if people had gotten ARMs in the 90's, they would have saved tens of thousands of dollars.  Why yes, that's true.  And why is that?  Because of Alan Greenspan's manipulation of the interest rate.  And on this basis he was encouraging people to go out and get ARMs in 2004, with the bubble well on its way, knowing that he had just held interest rates down artificially for years, so they had nowhere to go but up—and therefore also knowing that he would almost certainly be raising them again in the not-too-distant future.  This is like encouraging people to drive a car whose axles you've almost finished sawing through, because hey, it's been driving just fine up until now!

Please pardon me.  I cannot type anymore, with my head exploding and whatnot.

So I'm glad to see the press showing a little willingness to criticize their former idol.  But if there were any justice in the world, Greenspan's name would be required to be written as Alan "Father of Catastrophic Economic Meltdown" Greenspan henceforth at all times and in all media.

Comments

[KDelphi]

Amen! Ot, like jumping out of a six story building, and, looking down at the fourth floor, and, saying, "So far , so good!"

Hi. I was BANNED from Common Dreams---anyone else?

From what an attorney friend tells me, even is they did not post it, they have every right to throw people off, UNLESS (and here's the rub--they never post it) they have 501 (c) (3) status. Then, they have to present you with their tax records, blah, blah. I was mad enought to do it yesterday.

Does anyone know who these people are, by name? I heard they were a bunch of rich people , many of whom were Obama delegates.

So, why let it bother me? I think it is because we are raised to believe taht "people just cannot do that here"--well, they sure as hell can! We also are not used to being told what to do---and, in this case, we shouldnt be. Still being somewhat undecided before now (never mccain!), this is the proverbial straw, for me. Obama backers I know dont belive me--they said it must be curse words or soemthing. Everybody cursed in there---maybe it was the statistics on Obama's "policies" in the end. Who knows.

Forgive me ranting a bit--I'm still angry as hell.

Anybody else?

[John Caruso]

KDelphi: I finally responded to you on the CommonDreams thread. About this, though...:

Obama backers I know dont belive me--they said it must be curse words or soemthing.

...yeah, that's the worst part. People who haven't experienced CD's arbitrary dictatorial censorship firsthand just don't believe what they're capable of (and it's hard to blame them, since it's hard to believe how arrogant CD can be). Fortunately I've got the goods on them. There's a regular trickle of people hitting my postings about them based on Google searches for "CommonDreams censorship"—so it's clear that they keep racking up victims. But they won't even allow discussion of what they do on CommonDreams itself, so the people who're still there are none the wiser.

It's disgusting and it's sad, but it's also a reminder that the left is perfectly capable of just the same kind of vindictive, petulant control-freakery as the right. Not a pleasant lesson to learn, but a very important one.

[tiny peanut]

Yeah, I was one of those who was booted off CD.
I still read it, but with a whole new attitude.
I love reading Distant Ocean- some of the best writing in the blogosphere (even though I'm an Obama supporter- no apologies).

[John Caruso]

TP: Thanks for the kind words; they're very much appreciated. And this especially...

(even though I'm an Obama supporter- no apologies)

...does you tremendous credit. There aren't many people who can watch their ox being gored and not take it personally.

[Rosemary Molloy]

Well, I USED to be an Obama supporter, but after reading your blog and others with the same take on the ruling class, I may go for Nadar. I have no hope at all that the new president will be able to--or want to--give the less-than-wealthy a chance to live decently. Worse, I don't believe he will allow people in other countries to die in their beds. Am reading Morris Berman's "Dark Ages America: The Final Phase of Empire." Try it if you really want to get depressed,

[KDelphi]

Hell, I may end up voting for Obama (Moore/Alexander will not be on the Ohio ballot--nor counted). Some of his programs, lame as they are, might, at least,not make things worse for some family members.

That doesnt mean that I expect much.

However, if the Dems get both Houses and the presidency--they will have trouble thinking up excuses--but, there's always teh Wall St. Bailout that they HAD to do (Because it worked so well), so they "cant afford to do what they would have done for everybody". Hell, even Dems say that the tax breaks will take "ten yrs to implement" ie--rolling them back. What bs--implement Sanders Amendment and take 10% off the top of millionaire's golden parachutes tomorrow!

As I've said before--I NEVER want to hear a freemarket capitalist tell me that we cannot afford anything, ever again! After FISA Amend--I never want to hear that "socialist medicine will destroy our freedom". After teh Wall St rip-off--I do not want to hear about "redistributing the wealth". I just hope that enough people realize that laissez-faire capitalists have "burned alot of bridges" with their actions--we should hold them to account.

If "Socialism" scares you--if you can afford it--go to Scandanavia--I wish I had stayed while I had a chance. I have also had medical care in Italy, Denmark (stayed for a year), Canada and Mexico. Except for Mexico (which was, basically, giving me an Rx to buy a "new" Rx drug), care was immediate, free and excellent (I have been treated at Mayos and Cleveland Clinic--so I would know).

I implore progressives--do NOT let them fool you again! EVERY civilized (are we?) country in the world has , or is implementing (Mexico, China reverting bacK) single payer health care. Obama's plan wil leave at least 15 million people behind.(Who decides who?) 20,000 DIE every YEAR in the US from a lack of heatlh care--HOW can this be morally sound, when we just bailed out the elites to the tune of $1 trillion? "Wait times" for necessary care are virtually identical, for optionals--as long as sic weeks--but these are OPTIONAL procedures.

Support Rep Conyers, Kucinich, and most of the CBC in HR 676=--Medicare for all. 20,000 people (or 80,000 over four years) will be very glad you did.

[John Caruso]

Rosemary: That warms my cockles. Honestly, I'd be ecstatic to be wrong about Obama (and the Democrats generally, if they get their three-way majority), but I'd also be astonished.

KDelphi: However, if the Dems get both Houses and the presidency--they will have trouble thinking up excuses--but, there's always teh Wall St. Bailout...

Oh yeah, and plenty of other excuses. One of which will be that they can't possibly legislate like they'd like to because then they'd lose the House again in 2010, or the presidency again in 2012, etc, etc. And if history is any guide, the faithful will defend every stab in the back as a necessary bow to pragmatism.

[KDelphi]

tiny peanut--How are you still able to read the articles on Common Dreams? They STILL send me the newsletter--but , if I try to read an article listed--BANNED! O mean, I cannot even click on an articleso read it, much lses post.

I had an article of theirs I wanted to keep to study, so I put a copy on Desktop--I clicked it the other day to finish ot and, -BANNED.BUMKISS.NADA.NAILED.ZAP. ZILCH. Sorry--my "bad" leg kept gong into spasm, so I am on muscle relaxers=-I think Id better not post anymore
Thanks.

[KDelphi]

I'm sorry about the last post--it only happens rarely, that I have to take this drug. It is from an old motorcycle injury--makes me kindve silly--well, sillier than I already am!

[tiny peanut]

TO KDelphi- I'm not sure why you can't read the articles on CD, that's seems odd.
Even when I'd been booted off from posting, I could still go to their website and read the articles. Sometimes I go to Truthout.org instead (lots of the same authors are posted there) and I look at bunch of other news/op blogs- if there's time.

The thing I find really hard to take on CD lately (besides censorship!!) is that so many of the comments are angry and mean-spirited- and CD doesn't care to regulate those. So why did so many of the rest of us get banned from CD? Curious, no?
What are they afraid of, really? Actual public discourse?

Given that the U.S. has descended into an even stronger corporate police state in the last eight years under Bush, I'm seeking intelligent, and thoughtful alliances and new strategies.

[John Caruso]

The thing I find really hard to take on CD lately (besides censorship!!) is that so many of the comments are angry and mean-spirited- and CD doesn't care to regulate those.

I don't usually read CD comments anymore, but when I looked at some comment threads recently I was really struck by this as well. There's a lot of sniping and insults going around, and CD apparently doesn't to do anything about it (despite the fact that it violates the intro text and number one point on their new comment policy).

I think you have the reason exactly right: what they resent most is actual public discourse (specifically, discourse with which they disagree). From what I've seen they censor mainly on political content rather than bad behavior—the polar opposite of how a comment policy should be handled by anyone who genuinely values freedom of speech. Which leads to a pretty clear conclusion.

[tiny peanut]

Thanks, for your reply, John.
It's another thing I appreciate about your blog, "conversation"!!

[tiny peanut]

Oh, and yes, I agree with you- how CD is being run these days IS the polar opposite of what a comment policy should be about.
There have been some really terrible personal and even quite racist attacks on individual posters.
Pretty disappointing, really.
No wonder so many people disrespect the left and what we stand for, if one of the most visible "progressive" Op/Ed boards like CD can't offer a true arena for discussion!!