Conservative Alan Greenspan: Not Me, Not Me!
Andy Kroll says The Oracle Rewrites History:And why didn't Mr. Masters of Business Administration - George W. Bush see that Republican centric economic policies and anti-regulation zealotry were disastrous. One could easily think that Bush and his Republican hand maidens in Congress did, and still do, hate America and democracy.
Alan Greenspan, the economic sage and former chair of the Federal Reserve, has been on a mission to set the record straight on the financial crisis—not least his own role in it. In March, the Brookings Institution published a detailed, 66-page paper [pdf], he authored on the crisis’ origins. Most recently, he used a three-hour hearing on Wednesday by the congressionally-chartered Financial Crisis Inquiry Commission (FCIC) to discuss how subprime mortgages and securitization fueled the meltdown. Except Greenspan hasn't been describing recent history so much as rewriting it.
Greenspan, who chaired the Fed from 1987 to 2006, has received plenty of blame and opprobrium for the central bank's role in the subprime meltdown and broader economic crisis. The Fed, critics say, failed to rein in abusive practices by subprime lenders by choosing not to flex its regulatory muscle. For a time, it let credit card companies off the hook with a 2004 ruling that overdraft fees weren’t loans, and thus not subject to fair lending law. Consumer advocates also say Greenspan’s policy of keeping interest rates low during the 2000s paved the way for the housing bubble.
But reading Greenspan's testimony before the FCIC, you'd think the Fed was the Lone Ranger of regulators, a vigilant crusader on behalf of homeowners raising red flags about toxic mortgage products and the looming housing bubble. He touted the Fed's actions under a 1994 law called the Homeownership Equity Protection Act (HOEPA) that gave the Fed the power to prohibit "unfair," "abusive," and "deceptive" mortgage lending practices. "My colleagues at the Federal Reserve were aware of their responsibilities under HOEPA," Greenspan said, "and took significant steps to ensure that its consumer protections were faithfully implemented."
Carolyn Baum says Greenspan’s Delusions Get Much Worse With Age:
As for Greenspan’s claim that only a few predicted the post-bubble fallout, "that’s preposterous," says Bill Fleckenstein, president of Fleckenstein Capital in Seattle. "I had time to write a book about it."
The book, aptly named "Greenspan’s Bubbles," was written in 2007 and published in January 2008.
Greenspan told Bloomberg TV neither he, nor anyone at the Fed, heard about problems brewing in the banking system.
That’s patently false. I know for a fact that regulation and supervision division staff at some of the Federal Reserve District Banks reported risks and irregularities to the Board in Washington.
