Or Greenspan is a Fascist. Or a Marxist. Or whatever Glenn Beck and Rush Limbaugh, et al., will come up with to describe his sudden change of heart on the Bush Tax Cuts:
LONDON (CNNMoney.com) — Former Federal Reserve chief Alan Greenspan believes Congress should let the tax cuts enacted by President George W. Bush expire for all Americans in order to address the widening deficit, according to a TV interview airing Friday.
“They should follow the law and let them lapse,” Greenspan told Bloomberg TV’s Judy Woodruff.
My how times have changed. Here’s Greenspan from 2
January, 2001:
In a prepared statement he read this morning to the Senate Budget Committee, Greenspan suggested that because of the current budget surplus, a tax reduction would help buttress the nation’s long-term economic health.
“The sequence of upward revisions to the budget surplus projections for several years now has reshaped the choices and opportunities before us,” said Greenspan. Given such a surplus, he added, “it is far better, in my judgment, that the surpluses be lowered by tax reductions than by spending increases.”
This man was awarded the Presidential Medal of Freedom in 2005 by George W. Bush. Somehow I doubt President Obama is going to be quite as grateful for Greenspam now acknowledging the obvious, instead of telling Congress in 20001 what Bush wanted him to say (Tax cuts? Great idea!) so that Greenspan would ensure his reappointment as Chairman of the Federal Reserve.
I wonder if he now thinks groveling at the feet of that walking photo op was worth insuring that the surpluses Clinton generated would turn into the largest deficits in US history.
Oh wait. I forgot. After he left the Fed he went to work for “Paulson & Co. as an adviser on economic issues and monetary policy”, the firm that made billions of dollars betting that the market for collateralized debt obligations (i.e., mortgage backed securities) would collapse.
Paulson & Co. was the Hedge Fund that shorted the infamous ABACUS CDO deal which it created amd that Goldman Sachs marketed. Goldman settled fraud charges brought by with the SEC yesterday in connection with that transaction. Paulson has made billions of dollars for his fund since Greenspan became an economic adviser. I wonder what Greenspan got paid for his “advice,” don’t you?
Actually, I think you give Greenspan too much credit here:
I don’t believe that Greenspan endorsed Bush’s tax cuts to keep his job at all. I think he really did believe what he said – that if the deficit got too small that would be bad because Congress would put that money to increased spending.
The man was a disciple of Rand after all. He was more afraid of Congress having money to expand programs than he was of a recession. He didn’t know about the two wars that Bush was going to start and he didn’t believe that the banks were a house of cards waiting to fall.
I think the man really believed in his libertarian economic nonsense. Maybe he still does.
When Clinton was in office in 2000, Greenspan advocated using the surplus to pay down the debt, so I think he believed whatever would benefit his position at the time.
Here’s a link to support my last statement:
Then Bush came into office and it was tax cuts were the greatest thing since sliced bread. He’s a slimy opportunist.
What a lying scag.
Say what you will, Greenspan is the only one of the Chicago-School types ever to man up and admit any error at all. He admitted in Congressional hearings that his assumptions regarding the motivations of business people were in error, and now calls for tax breaks he supported to be ended. He is to this economic disaster as Robert MacNamara was to Vietnam.
The first thing the Democrats needed to do from November 5, 2008 on was to scream loudly and repeatedly that this economic disaster proved that all of the deregulation, magic-of-the-marketplace pap we have been force-fed since the late ’70’s was wrong and needed to be re-thought. Business schools and economics departments should have announced mass firings and new hirings as they sloughed off people now exposed as charlatans. Instead, we are standing here in the rubble of the Chicago School’s assumptions trying to figure out how we can do the same things to the economy again.
All those Chicago school guys have tenure and years of working for republican administrations. I’d like to wave my magic wand and get them fired and exiled to St. Helena but sadly it isn’t going to happen. Because their policies did work for the people with large sums of money at their disposal they will always get a hearing, a seat at the table and be held in high esteem by our idiot corporate media.
Don’t forget that Paulson just donated a boatload of money to NYU to name some kind of economics type chair after Greenspan. Obviously, NYU cares more about the money then what is being taught.
My point wasn’t really about tenured professors and B-schools. It was that the pseudo-science of economics as an inevitable force of nature rather than as a series of human choices requiring human mediation should have been discredited because it had so manifestly failed to do what it said it would. A public dialogue on this failure should have been forced by people who want the economy to actually work for everyone. It wasn’t. One conclusion I draw from this is that Democrats have absorbed many of the same erroneous assumptions regarding the magical properties of markets that Republicans have.
One of the major problems is that Chicago school economists led two lives – the first as economists, the second as polemicists or policy “experts”. Milton Friedman is a classic example of this. Friedman received his Nobel prize (really the Bank of Sweden prize) for something that was a legitimate contribution to understanding monetary policy. But Friedman’s Free to Choose: a Personal Statement and Capitalism and Freedom rely on little economic understanding at all; they are political polemics against government.
One of the best scientific economists, Robert Heilbroner recognized very clearly that there were three alternative ways of making economic decisions – tradition, decree, and markets. And that each had their advantages and disadvantages; that is straightforward scientific study of economic decisions, not a ideological view that privileges markets. Later Chicago School economists like Gary Becker want to apply their economic models to everything from spouse selection to gang behavior. For them the actual production of goods and services recedes into the background as just a special case. It is a cynical view of decision-making that promotes as a goal a cynical view of the world.
In the end, they have created a world of cynics by Oscar Wilde’s definition:
Broken clock and all that…
Why does he think that anyone thinks that what he says is important? Or was this Andrea’s idea because they’ve not been invited to parties like they used to be?
People, people, please!
Luke 15:7, for God’s sake.
Recced for calling Greenspan a sinner instead of a savior.
Greenspan was reputedly a student of Ayn Rand.
Ethical egoism? Milton Friedman undoubtedly approved. And maybe that’s also why he was a supporter of Reagan, a “Republican” with a capital R, and a “libertarian” with a small l.