We had a server outage, and we're rebuilding the site. Most of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Greenspan and the Guilt of Others

by Felix Wadewitz Saturday, May. 01, 2010 at 6:52 PM
mbatko@yahoo.com

Before the committee, Greenspan immediately went on the offensive (cf. Creole trick). The irresponsible loans of banks caused the crisis, not the low interest of the Fed. The Fed failed in regulating the banks because its employees were not neutral.

GREENSPAN AND THE GUILT OF OTHERS

The Maestro became the bogeyman of the financial markets. Before the US Congress, the ex-chairman of the Federal Reserve fought for his reputation and lost. The respect of the US public for the former chairman Alan Greenspan has fallen enormously.

By Felix Wadewitz

[This article published in: DIE ZEIT 4/7/2010 is translated from the German on the Internet, http://www.zeit.de/wirtschaft/2010-04/greenspan-kongress-untersuchungsausschuss.]


Seldom have the traders on Wall Street criticized so much. He only tries to save his backside. This is not about Tiger Woods. Things are far more complex with Alan Greenspan. A few ordinary tees are not enough to reconcile the world with him.

Nothing offers so many topics of conversation as the fall of a superstar who for years was the standard of all things. Alan Greenspan was once the admired Maestro, Mister Dollar. He was regarded as nearly unimpeachable when he retired in 2006 after nearly twenty years at the helm of the Federal Reserve.

He had kept inflation low. He brilliantly mastered the stock market crash of October 1987. He gave America one of the longest growth phases of its history. After September 11, 2001 he saved the world economy from a recession by drastically lowering the interest rate.

Then the financial crisis erupted. Starting from the US housing market, the crisis quickly seized the whole world. Banks like Lehmann Brothers went bankrupt or had to be bailed out by the state like Hypo Real Estate in Germany. The taxpayer held out his head for financial market bets that were disasters and which he did not even know existed.

Greenspan landed right behind the speculators on the list of scapegoats. Greenspan first made possible the bubble on the housing market with his low interest policy for years and thus provoked the crisis. This was a central reproach. The banks had vast amounts of money so they gave loans to people who could not really afford them.

To delete the risk from their own books as fast as possible, the banks bundled these and other credits in packages whose contents were hardly reviewed and quickly sold them again. The Federal Reserve saw all this and should have prevented it, it is said now.

That Greenspan does not blame himself for anything is even more serious. He is still not a Mensch, Nobel Prize winner Paul Krugman decried in his blog because the ex-Federal Reserve chairman did not simply say he was sorry.

The old man did not want to stand for all this. On Wednesday he faced a Congressional investigating committee on the financial crisis. He came to save his life work.

For weeks, he prepared for his appearance in the media. Firstly, the Brookings Institute published one of his papers in which he defended himself and his official acts. Then he toured through the Sunday political talk-shows on television.

Before the committee, Greenspan immediately went on the offensive. The irresponsible loans of banks caused the crisis, not the low interests of the Federal Reserve. Greenspan pointed to the semi-state mortgage giants Fannie Mae and Freddie Mac that accumulated toxic credits for years. However the Fed had no resources to better regulate these processes.

Many doubt this statement. I would scrutinize every word of his a hundred times, said Robert Auerbach of the University of Texas who wrote a critical book about the Federal Reserve under Greenspans leadership. The Fed failed in regulating the banks because its employees were not neutral.

For years it was common for the inspectors of the Fed to be uncritical in their visits to the banks. From Auerbachs view, what is scandalous is that Greenspan found everything completely okay. Auerbach concluded: The Fed always turned away when something dirty could be seen.

Therefore the interrogation on Wednesday only focused on the margins. The committee chairperson Phil Angelides put some internal documents under Greenspans nose that revealed the Fed failed to limit deceptive awarding of credit although it had the power to do that. They could and should have regulated that but did not, Angelides declared.

That seemed to leave Greenspan cold. In his term in office he made terribly many mistakes but no examples occurred to him regarding the financial crisis. Instead the rating agencies had responsibility since they wrongly assessed the risks of credit packages. The government pressed Fannie and Freddie to help as many people as possible in buying a home.

All cow-dung, trader David concluded. Everyone blames the others and at the end no one is responsible.

The television programs on Thursday promised more excitement. Golfer Tiger Woods will celebrate his return. If the athlete wins the Masters Tournament in Augusta, the extra-marital affairs will be forgotten. Americans love comeback stories.


Report this post as:
Share on: Twitter, Facebook, Google+

add your comments


Local News

Woolsey Fire: Worst News of 2018? J01 12:18AM

Oppose Environmentally-Harmful Development D10 4:03AM

Oppose Environmentally-Harmful Development D10 3:58AM

OUR HOUSE Grief Support Center Presents Night for Hope O30 5:38PM

Marshall Tuck’s racist dog whistle O27 5:01AM

Marshall Tuck’s ethnocentrism contradicts Californian values O27 4:32AM

Contra Costa-Hawkins O25 3:48AM

Debunking Some Anti-Prop 10 Propaganda O12 6:56AM

Why Should California Choose De Leon Over Feinstein? O10 9:55PM

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

Watch the Debate: Excluded Candidates for Governor of California M31 5:20AM

Change Links June 2018 posted M28 7:41AM

More Local News...

Other/Breaking News

Paraphysique de manipulation mentale et sociale J15 9:51AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

Markets as a Fetish, Globalization, and Dissent Management J14 1:03PM

State Debts - The Primal German Fear J13 5:09PM

Sans liberté, sans égalité, sans fraternité J13 8:09AM

From Progressive Neoliberalism to Trump - and Beyond J12 9:22PM

Copper Cures Cancer J11 1:42PM

Steven Taylor, Investor who Evicts J11 9:24AM

Du sectarisme, des sectes, des clans J11 8:10AM

“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen J10 6:34PM

Patrick Kilpatrick discusses and signs Dying for Living J09 11:51PM

SexActs vs Sexuality USA 2018 Invitations to Power Marriages without Affection J09 8:36PM

Changer de mentalité, changer de société J09 9:17AM

Teacher Strike? Time for Labor Studies J09 6:26AM

December 2018 Honduras Coup Update J08 10:12PM

Paraphysique de la désespérance J07 9:38AM

The Unification Church with Rev Moon is in La and Orange Counnties J07 9:07AM

Time to Start Imagineering a Post-Ayatollah Iran J05 10:00PM

L'écomorphisme, du culturel et du temporel J05 10:33AM

Sexual Harassment Charges of Men Suing Women who are accused of Harassing Men are now 10% J05 4:08AM

Stases psychiques et stases sexuelles J04 11:34AM

Paraphysique de la sous-vie J02 9:01AM

Paraphysique de la biomasse mondialisée J01 9:45AM

La mathématisation du monde D31 7:42AM

Refugee other Asylum I.D. reraly granted U.of :ouisiana DEc 29 ,2018 D30 5:32AM

L'inhumanité thermonucléaire D28 10:12AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy