(paintings by Erin Crowe)
Someone I know pointed out that when Alan Greenspan stepped down as Federal Reserve Chairman a couple of years back, he did so under heavy political fire from Wall Street, the mortgage industry, and Congress--because he had been raising interest rates to slow the economy. Ben Bernanke--with the approval of Congress, Wall Street, and the press--reversed that Greenspan policy, opening the spigot to easy money that kept the bubble growing until it burst. So despite the theatrics in Congress yesterday, Greenspan can't be blamed for the mess we're in right now.
Bush can be blamed. Paulson can be blamed, Bernanke can be blamed. Wall Street can be blamed. Even Congress can be blamed.
Much easier than taking responsibility is for all of the above to scapegoat Greenspan--who presided over a tremendous period of growth in the US economy during the Clinton administration and kept things from collapsing after 9/11. In his testimony yesterday, Greenspan admitted making mistakes. That's more than I've heard anyone else do. Personally, it seems to me his biggest mistake was resigning under pressure to lower interest rates. He should have stood fast and defended the independence of the Federal Reserve against political pressure from Congress and the White House. But I'm sure Alan Greenspan, an Ayn Randian and Libertarian at heart, could not believe that business leaders would corrupt the entire system with phony bond ratings to the point where, as Anna Schwartz told the Wall Street Journal, the problem is that no one believes anything anyone on Wall Street or the US Treasury says anymore.
Businesspeople have gone from being "wealth creators" to "wealth destroyers" in the popular imagination. And honestly, if they are "wealth destroyers" why shouldn't they be heavily taxed? Of course it is time to "soak the rich." After all, they've just hosed the rest of us, haven't they? Why should they get away with it, laughing all the way to the bank? As Bob Dole used to ask: Where's the outrage?
IMHO Barack Obama has not been aggressive enough against what President Roosevelt (Republican Teddy Roosevelt, for all you McCain supporters out there who claim he's another T.R.) called "the malefactors of great wealth" (possibly because many donated to his campaign). Yet the American people are mad, and they want someone to the pay the price. This collapse did not happen on Greenspan's watch, and it is disgraceful that the media is permitting him to be scapegoated when guilty parties--including Paulson, Bernanke, Bush, Dodd, Frank, and Schumer have been given a pass...