Alan Greenspan is worried about his reputation and is trying to set the record straight in an interview with Rupert Murdoch’s Wall Street Journal. I was prepared to be sympathetic after reading this quote:
"I was praised for things I didn’t do," Mr. Greenspan said during one
of three interviews at his sun-drenched office in downtown Washington,
D.C. "I am now being blamed for things that I didn’t do."
But then the reporter tells us that the former Federal Reserve chairman "doesn’t regret a single decision." This makes my bullshit detector go off. How could any thinking person live a full life, especially one at the pinnacle of international leadership, and say with a straight face they have no regrets. Even Frank Sinatra had a few.
Greenspan wants us to draw the correct lessons from his tenure and the current market disaster, so that we don’t implement the wrong policies. But what if the wrong policies are the very ones implemented on Mr. Greenspan’s watch?
Bravado aside, "Mr. Greenspan now admits he was wrong about the improbability of a
housing bubble. Yet he has long maintained that bubbles are an
unavoidable feature of a dynamic economy." Tell that to the millions who have lost good jobs with benefits and pensions, to be replaced with low-paid service positions, often part-time, often lacking the barest health care. Tell it to the people kicked out of their houses.
Mr. Greenspan was a disciple of Ayn Rand, who rebelled against communism by creating her own totalitarian religion, of the individual without limits, without any commitment to community, without any responsibility. It was natural that Mr Greenspan, an old sax player, would modulate this into the free-market ideology that became dominant after 1980.
Mr. Greenspan was no Howard Roark. He was a government functionary and political appointee. He not only preached for market solutions but actively worked to undo the policies that actually make the market work: anti-trust enforcement, regulation
against monopolies and cartels, tough rules and oversight of the
financial system a progressive tax system to, in part, militate against the rise of a hereditary plutocracy.
Only in a mixed economy that had produced the great American prosperity and security of the post-war years could one nurse the libertarian fantasy that "market forces" would take care of everything. Only when you had ascended to the heights of power, where all your friends and contacts were incredibly rich, could you continue to hold to this faith as the evidence mounted that it was failing the nation.
Mr. Greenspan happily embraced the devil-take-the-hindmost philosophy as Fed chairman, pumping up bubbles and let banks and Wall Street do as they pleased because, well, shit happens. And his friends kept getting richer. No wonder the "dour conservative" reversed himself and said the Bush tax cuts in wartime were hunky-dory. Let freedom ring.
Now the financial system, shorn for years of the regulatory balance that was an important as speculative animal spirits, is in very dangerous territory. Mr. Greenspan’s reputation may be the least of our worries.
The real problem is that the corporate media, not just the WSJ, made Greenspan into an all-knowing demigod in the 1990s, and, even though he’s been responsible for two bubble-bursting recessions since, cannot admit any regret.
Most Americans believe whatever the corporate media report, about Greenspan, the never-ending war against Iraq, the impossibility of single-payer health insurance, the importance of how much Edwards pays for haircuts, etc., ad nauseam.
While I commiserate for those journalists affected by corporate media’s job reductions (I was myself, a few years ago), the fact that corporate media are suffering, in part because of doing a lousy journalistic job, really does not worry me.
New Internet media are, in many markets, so much better than chamber-of-commerce-stenographing newspapers.
Because the new media tell the truth, without fear of what the advertisers might think.