Greenspan Nonsense

from Peter Radford

OK. I am going to say very little on this. His words stand for themselves. Alan Greenspan needs to pull down the shades and stop. He is officially nuts. For those who missed it: he is on record in the Financial Times, as saying we should get rid of the recently implemented financial regulation. It is, he argues, an impediment to growth. And, even worse, he glosses over the catastrophe of 2008 as if it were a minor blip. Deregulation worked wonders he says, with” notably rare exceptions such as 2008″.

Notably rare exceptions. Like 2008. Roll that around on your tongue a bit. Then try to spit it out before you choke. 

What a farce.

This particular “notably rare exception” happens to have been a dire crisis of epic proportions that left millions of people homeless, unemployed, impoverished, and our economy in tatters. We have yet to recover fully. That exception even has a name: The Great Recession.

Only a true student of the child like Ayn Rand could gloss over the events of 2008 by dismissing them as a “notably rare exception”.

The point, Alan, is that we know these exceptions are not rare. Though they are indeed notable. There is a well thought through body of research on the subject. It includes the work of people like Minsky. I recommend you get your nose out of “Atlas Shrugged” and into someting a little more relevant to the subject matter at hand. Start with “Can It happen Again?” written by Minsky well before … it happened again. Had you read that book while you had the power to stop the disaster maybe your reputation would have survived.

For the record, Alan, I recall sitting with you and listening to your deregulatory hype, to your arguments, and to your dismissal of non-market based ideas. I recall first hand your incessant support of market forces – whatever they are – and your equally incessant put down of regulation. You believe in markets despite the evidence. Yours is a faith based doctrine, and it did untold damage. The bank you consulted with, and for which I worked, proceeded to lose a ton of money subsequently. We damn near went under. Rare exceptions indeed.

How rare or exceptional can these events be when I myself have worked through two, and lived through two more?

You are wrong Alan. Hopelessly. Grievously. And recklessly wrong. The banking system needs more, not less regulation. You blew it. We all blew it. The economic carnage of 2008 stands as an indictment of your entire world view.

So. Leave it be. Stop making a fool out of yourself. Enough.

But. I agree on one point. We need to trash the recent re-regulation.

And then we need to replace it with something a whole lot tougher.

If we want these events to be truly rare or exceptional we need to return banking to the boring, low profit, and much smaller industry that it was before deregulatory advocates like you set it free.

One thing we don’t need is more Greenspan nonsense.