October 23, 2008
Wow! The arrogant, crusty old thief and Darling of Wall Street finally admitted that he, "made a mistake" by deregulating the financial system throughout his 18 years as head of the most powerful criminal syndicate in the history of the world - The Federal Reserve. Now, after he and his gang have finished their controlled demolition of the US economy and robbed the country, he stands before congress and glibly says he made a "mistake". Now that's Hutzpa, folks! Poor Alan goes on to say,
"If we are right 60 percent of the time in forecasting, we’re doing exceptionally well. That means we are wrong 40 percent of the time. We at the Federal Reserve had a much better record forecasting than the private sector, but we were wrong quite a good deal of the time."
"... a good deal of the time" amounts to the 18 years he served the Illuminati, manipulating, controlling and stealing the people's money through the ruling elite's own private corporation - a mafia - known as The Federal Reserve.
Greenspan said "You know, ... I have been going for 40 years or more with very considerable evidence that it was working exceptionally well." He lied that he was "very distressed" and in a state of "shocked disbelief" when he realized the banks inability to regulate themselves. Considerable evidence? There is also considerable evidence the entire crisis is the result of a "long term strategy", as F. William Engdahl put it, planned in order to collapse the system and thereafter achieve a greater concentration of wealth and power in the hands of the very few who continue to control the U.S. and other world economies.
As Greenspan stood before Congress, Bill Sali, Republican from Idaho questioned Christopher Cox, the Chairman of the Securities and Exchange Commission. Sali asked Cox, "Is somebody going to go to jail?" (for these crimes). Cox "quickly backed off a hard line approach", according to the NYT and answered,
"There’s no question that somewhere in this terrible mess many laws were broken. You know, cleaning up the mess through law enforcement after the fact — while important, is not ideal."
We have 2 rather obvious questions about that exchange:
Mr. Cox, "law enforcement" is your job. The Security and exchange commission, "holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets." The supposed purpose of this hearing is to investigate the crime and to "clean up the mess", as you call it, which was caused by deregulation! Your answer, Mr. Cox, clearly indicates that you are still not willing to enforce or regulate.
In his cynical response, admitting that "many laws were broken", Cox continues to abrogate his responsibility to "enforce and regulate" by stating that imprisonment of the criminals, "is not ideal". Can you hear a sitting Judge telling the prosecutor that prison "is not ideal" for a bank robber or murderer in a U.S. criminal court? It would certainly not be ideal for the thief or the killer!
The US government has always used law enforcement and punishment to fight and "clean up" other crimes ranging from smoking marijuana to armed robbery and murder. Have their crime-fighting tactics suddenly changed for those behind these high crimes? "Impunity" comes to mind.
Alan Greenspan should not be standing in front of the so-called "firing line" on Capitol Hill. He should be standing before a criminal tribunal to be tried and convicted of his crimes. He should then spend the rest of his sordid life in prison and not in a "country club" like the federal prison at Allenwood, with its horticulture training, outdoor courts for tennis, basketball, handball, bocce, and horseshoe pitching, running track and indoor gym. I'm sure the nation's poor and many of those who have lost their homes and retirements due to his deregulation policies would agree. Instead of Allenwood, Alan Greenspan should serve the rest of his natural life in a real prison, alongside men who have committed far lesser crimes than he. In my 8 years working in U.S. prisons, I met a number of men behind bars who would like to get to know him.
Those lawmakers and law enforcers who supported this capitalist system of theft and corruption and who are now "grilling" Greenspan, should be housed in barred cells along the same catwalk. In the unlikely event of their imprisonment, our advice to all of them is, "Pick up the soap".
- Les Blough, Editor
© Copyright 2008 by AxisofLogic.com
BIO AND ADDITIONAL ESSAYS BY LES BLOUGH
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Greenspan Concedes Error on Regulation
October 23, 2008
By Michael M. Grynbaum
New York Times
|Alan Greenspan, former Federal Reserve chairman, with John Snow, former Secretary of the Treasury, at a hearing on Capitol Hill on Thursday. (photo by Doug Mills)|
Facing a firing line of questions from Washington lawmakers, Alan Greenspan, the former Federal Reserve chairman once considered the infallible maestro of the financial system, admitted on Thursday that he "made a mistake" in trusting that free markets could regulate themselves without government oversight.
A fervent proponent of deregulation during his 18-year tenure at the Fed’s helm, Mr. Greenspan has faced mounting criticism this year for having refused to consider cracking down on credit derivatives, an unchecked market whose excesses partly led to the current financial crisis.
Although he defended the use of derivatives in general, Mr. Greenspan, who left his post in 2006, told members of the House Committee of Government Oversight and Reform that he was "partially" wrong in not having tried to regulate the market for credit-default swaps.
But in a tense exchange with Representative Henry A. Waxman, the California Democrat who is chairman of the committee, Mr. Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Mr. Greenspan said.
Referring to his free-market ideology, Mr. Greenspan added: "I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact."
Mr. Waxman pressed the former Fed chair to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Mr. Waxman said.
"Absolutely, precisely," Mr. Greenspan replied. "You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."
The oversight committee held a four-hour hearing on Thursday to determine what gaps in the regulatory structure abetted the crisis that has roiled the world’s financial markets.
Mr. Greenspan appeared alongside Christopher Cox, the chairman of the Securities and Exchange Commission, and John W. Snow, who served as secretary of the Treasury early in the Bush administration.
In his prepared remarks, Mr. Greenspan said he was in "a state of shocked disbelief" about the breakdown in the ability of banks to regulate themselves. He also warned about the economic consequences of the crisis, saying that he "cannot see how we will avoid a significant rise in layoffs and unemployment." Consumer spending will decline, too, he said, adding that a stabilization of home prices would be necessary to bring the crisis to its end.
Saying that his thinking "has evolved" in the last year, Mr. Greenspan also defended his record. "In 2005, I raised concerns that the protracted period of underpricing of risk, if history was any guide, would have dire consequences," he said. "This crisis, however, has turned out to be much broader than anything I could have imagined."
Several committee members asked who would ultimately be punished for a crisis that has ravaged their constituents’ savings accounts and could eventually lead to an enormous loss of jobs.
Representative Bill Sali, Republican of Idaho, wondered what Mr. Cox would say to "Idaho’s mom and pop investors who have lost so much of their hard-earned savings, their retirement funds, while some of the corporate C.E.O.’s have received, you know, golden parachutes and those kinds of things." He added, "Is somebody going to go to jail?
Mr. Cox replied, "There’s no question that somewhere in this terrible mess many laws were broken." But he quickly backed off a hard-line approach. "You know, cleaning up the mess through law enforcement after the fact — while important, is not ideal," he said. "The best thing that we can do, of course, as many of you are focused on — indeed, this hearing is focused on this — is to infer lessons from what happened and prevent anything like this and this astonishing harm from happening again."
In his prepared remarks, Mr. Greenspan said he saw "no choice" but to impose legal quality requirements for certain types of securities, and added that other regulatory changes would have to be made.
But he still gestured toward his faith in free markets, however shaky it may have become. "It is important to remember, however, that whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets," he said. Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.
At one point, Mr. Greenspan appeared to question the efficacy of increased oversight over the financial system, noting, "I think that it’s interesting to observe that we find failures of regulation all the time."
"If we are right 60 percent of the time in forecasting, we’re doing exceptionally well," Mr. Greenspan said. "That means we are wrong 40 percent of the time. We at the Federal Reserve had a much better record forecasting than the private sector, but we were wrong quite a good deal of the time."
The responses from the panel were met with little sympathy from Representative John A. Yarmuth, a Democrat from Kentucky, who likened the three witnesses to Bill Buckner, the former first baseman for the Red Sox whose notorious error cost his team the 1986 World Series.
"All of you let the ball go through your legs," Mr. Yarmuth said, using Mr. Buckner’s mistake as a metaphor. "And you didn’t want to let ball go through your legs, you didn’t try to let the ball go through your legs, but it got through."