Oops, my bad, says Greenspan...

This week Alan Greenspan got a well-deserved Congressinal grilling on his role in creating the credit mess that me are in right now. As with most huge ego guys, he couldn't quite see that he really made any mistakes when he effectively allowed the U.S. banking industry to run hog wild and sided with the Bush administration to prevent those at the state level who saw the trouble coming and tried to head it off. His primary defense of the policies that he help push that caused this mess is, "Who could have foreseen the housing value decline?"


Greenspan claimed that he thought that unfettered banks would do the right things and that housing values would just continue to climb forever, like they always have. Well he certainly gets a "D" for that view, as in, Duh! Several State Attorney's General tried to warn the Federal policy wonks about the chicanery that they were seeing and trying to prevent at the state level only to be turned away and even squashed in their efforts to pass state laws to prevent the mess by heavy handed Bushies claiming eminent domain over the entire financial process. Maybe we should have had a sound bite of Bush with Alan saying "You're doing a hell of a job Greenie."

Greenspan's remarks basically equate to saying, "Oops, my bad; who could have known." Well as the head of the nations bank and the most influential financial pundit of the time, the answer would seem to be - "We thought we were paying you to know." There is a phrase that covers a lot of sins in the real estate business that talks about things that the seller "knew or should have known" about his own house. We also use that phrase to discuss knowledge that the listing Realtor is assumed to know about the property. I think it applies to Greenspan in this case, too. How could 4-5 Attorney's General see the coming problems so clearly at the time and the smartest guy in the room be so blind. well remember that Ken Lay and Jeff Skilling and Andy Fastow were the smartest guys in the room down at Enron and they all ignored (willfully and fraudulently it turned out for Skilling and Fasatow - the jury is still out on whether Lay was himself a clueless victim of Skilling and Fastow) the warning about the mess that they were creating there.

But here we are, up to our eyebrows in foreclosed homes and just entering a credit crisis driven recession that is expected to long and deep and what do we get from Greenspan - "Oops, my bad!" He should be so embarrassed by his naivety in this matter that he should give back his Federal pension. Maybe they could break it up and give it to 8-10 regular Joes who have lost their houses their pensions and everything else. Oops, my bad. Did I suggest penalizing Alan Greenspan. I guess he really didn't break any laws, he was just clueless and apparently we still tolerate that in Ameria - at least we did at the top for the last 8 years.