Monday, April 07, 2008

John Law Checks In

And not from a Venice gambling hall, apparently:

There is more than a 50 percent chance the United States could go into recession, former Federal Reserve chairman Alan Greenspan told El Pais newspaper in an interview published on Sunday.

However, the U.S. has not yet entered recessionary state marked by sharp falls in orders, strong rises in unemployment and intensive weakening of the economy, he said.

"We would have to see signs of this intensification: there are some, but not many yet," he said. "Therefore ... I would not describe the situation we are in as a recession, although the chances that we'll have one are more than 50 percent."

It's an ongoing national scandal that Greenspan hasn't been dragged away from his lucrative speaking tour and put under some hot lights in front of Congress. But that would remind people of the obsequious treatment he enjoyed from politicians as Fed chairman, wouldn't it? And it might also remind a once happily deluded public of its own gullibility and lost innocence. If we're ever going to put this chapter of wayward economic policy behind us, there needs to be a DeGreenspanification -- a complete discrediting of some monetary policymakers and their political and media enablers. Despite some encouraging signs recently like this, we're not there yet.


Greenspan, the U.S. Fed chairman from 1987 to 2006, endorsed the Republican presidential candidate John McCain in the interview.

"I'm Republican and I support John McCain, who I know very well and who I respect a lot," he said.

The person who oversaw the two largest financial bubbles in history endorses a candidate who admits he doesn't understand the economy as well as he should. Perfect.


Blogger Dave S. said...

Looks like Greenspan's priorities (party over fiscal health/sanity) haven't changed.

4/07/2008 9:17 AM  
Anonymous Anonymous said...

From the "this" link: Interesting article. Looking at various components of our culture/economy --- ownership of various assets (including cash & cash flow), how Main Street is treated by Wall Street, corporate relationships with its workers --- throughout the entire country, in all kinds of neighborhoods, I thought this statement was particularly interesting: Greenspan said that "protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support."

I would think transparency, integrity of our financial systems and the corporate world in general, management that doesn't rob the future of a corporation and demoralize its fellow workers by unGodly execessive compensation for short-term changes/manipulations would also qualify. And his actions did the opposite. I suppose if we can't get people to buy stocks (or Wall Street's current financial innovative product) though bubbles, we can get them to buy a house by hook or by crook, because everyone has to live somewhere, even if they can't afford it.

I often wonder, what does the future hold for our kids, their children, and so on. Will they be buying multimillion dollars homes that are now $100k, and it'll be a fixer upper, with no land. Asset prices as they increase, won't they be exponential as the price gets bigger and bigger, and is it sustainable, especially as we Walmartinize the country?

4/07/2008 9:35 AM  
Anonymous Anonymous said...

There was a commenter at another blog who refers to Greenspan as "Bubbles".

Very apropos don't you think?

4/08/2008 10:31 AM  

Post a Comment

<< Home