04/09/10 Baltimore, Maryland – Poor ol’ Alan…
We almost felt sorry for him…
“Maestro mauled…” said the headline in The Financial Times. We wanted to maul him many times. But now that others were doing it…it made us feel sympathetic to the old scalawag.
Didn’t the Alan Greenspan Fed’s failure to curb subprime lending deserve to go into the ‘oops’ category, demanded chief tormentor Phil Angelides.
Mr. Greenspan defended his legacy. He was right 70% of the time, he said. The other 30% of the time he was wrong.
Hey, that’s not bad. Pity it’s not true. Greenspan was wrong 90% of the time – at least.
He thought those fancy derivatives actually spread the risk of failure…and made the system more stable.
He thought those subprime loans helped people of modest incomes realize the goal of home ownership.
He saw no risk in keeping the key rate at an ‘emergency’ low level…years after the emergency had passed.
But he hit one of those magic moments last week…when he was finally right about something. He declared that the yield on the 10-year note was “the canary in the coal mine.” This week, the canary wobbled…but stayed on his feet. He’s still standing…but looking a little peaked.
While the former Fed chief was in the spotlight at The Financial Times yesterday, the present Fed chief was front-page news over at The Washington Post. Alan Greenspan is a scoundrel, no doubt about that. But he was, in some ways, a better Fed chief than Bernanke.
The trouble with Bernanke is that he doesn’t know his limitations. He actually believes the Fed can look at the possible outcomes going forward and improve them before they come out.
“Fed chief sounds a deficit warning,” is the headline. He said Americans faced a “difficult choice.” It’s between higher taxes and fewer entitlement services, he said.
This doesn’t seem like a difficult choice to us. We’d gladly accept fewer “services” from the feds if they’d lay off on the taxes. But that’s because we’re in the half of the US households that actually pays taxes.
No kidding; the report was in yesterday’s news:
“Almost one half of US households pay no federal income tax.”
So, welcome to the beginning of the end. If half the citizens get bread and circuses without paying for them, you can bet that the whole shebang is headed for destruction. The math doesn’t work. Half the people have no interest in curbing taxes or spending. Obviously, those people would prefer to raise taxes – on us – rather than give up their free pills and retirement benefits. Even among the half that does pay taxes, most pay very little – less than they get back in ‘services.’
Meanwhile, the ‘rich’ get socked hard. According to the reports we’re seeing on scurrilous blogs and from our usually unreliable sources, the tax burden on the rich is set to rise over 60% of income – thanks to the health care charges they will have to bear.
By the way…the whole thing is a fraud. The services, that is…
Here’s how it works. In 2007, the private sector finally blew itself up – thanks largely to all that debt offered by Wall Street and encouraged by the Alan Greenspan/Ben Bernanke Fed.
So then…in comes the Fed again…and the US government…wearing white hats and pretending to save the situation. How? By bringing more of the economy under their control!
As far as we can tell, the last successful government program was WWII. And that was only successful because the competitors’ programs were also run by government. But that doesn’t stop them…
Bill Bonner
for The Daily Reckoning
Bill Bonner
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greedscam and bernquacke are wrong about everything and it’s not because they are stupid – it is because they are evil….
politicians promise other people’s money for everything under the sun…every cause always has a “compelling” justification….
the truth is that the rich and poor conspired to destroy each other and the country – only the poor didn’t realize that they were the chumps.
as in all games of plutocracy, the rich always win…
Short version: Too much power in one individual.
And, it was kind of pathetic watching Greenspan in the hearings.
The totality of the hearings were fairly good. It will be interesting to get the final report.
But we all know what that will be:
A BIG EFF!!!!
Short version: Too much power in one individual.
And, it was kind of pathetic watching Greenspan in the hearings.
Greenspan clearly didn’t understand the markets he was supposed to oversee and almost completely stifled the FED’s responsibility in regulatory oversight.
He is terribly responsible.
For 18 years he rode the limelight and loved it; for 18 years he rode a wild steer and didn’t realize he had been bucked off at the beginning.
It doesn’t take a rocket scientist to lower interest rates to zero……even I could do that!
“These people” live in a different world than us common folk. They don’t get it!
The totality of the hearings were fairly good. It will be interesting to get the final report.
But we all know what that will be:
A BIG EFF!!!!
As far as taxes, I live on a small pension and SS and I pay a fair share; the rich by definition don’t feel anything…that’s why they’re rich. See how many offshore their income so that they don’t pay any tax. Go ahead, do the research.
I would always squeeze a tear for the tax paying rich. But that is all I would do for them.