Alan Greenspan is a wonder. The Establishment still worships him and well it should – he’s never wavered from his allegiance to the richest among us. But ordinary Americans credit him, too, for financial wisdom, which is bewildering.
True, the Federal Reserve Chairman has been deft in fighting inflation and helping the markets recover from their own excesses. But while collaborating with President Clinton on reducing deficits – which meant Clinton had no money for traditional Democratic programs – Greenspan never saw fit to rein in the Wall Street gamblers. He let them borrow and buy on margin, so when the Internet bubble burst, the losses – some our losses - were terrible. He also found time to bail out the hedge fund gamblers who, falling, threatened to topple the whole Wall Street temple.
Greenspan’s record with George W. Bush is even worse. He lent his prestige to the Bush tax cuts; no matter that they wiped out Clinton’s surpluses and moved us back into big deficits for now and the foreseeable future.
No matter, either, that they now threaten our economy and the world’s, according to Robert Rubin and others.
A week ago, Greenspan, uncharacteristically, spoke plain English. Admitting some concern about the deficit, he said he’d prefer to reduce them by cutting spending. In other words, don’t touch those huge tax cuts for millionaires and major corporations. Save it on the boomers’ Social Security and Medicare.
Greenspan’s eyesight continues to be selective. He told a credit union conference yesterday that Americans’ household finances are generally in good shape. The reassurance comes despite Fed reports showing consumers are deeper in debt than ever before - $2 trillion in December – and bankruptcies were way up in 2003.
You can believe him if you wish. Me, I remember that the Great Depression was brought on by business and Establishment economists who rationalized their behavior.
PS While Greenspan abets the gamblers and helps Bush cut taxes for the wealthiest, he's silent on the minimum wage. It's been $5.15 an hour since 1997. Guess it's their own fault, those minimum wage workers. Why don't they rise up and conquer the world, the way Ayn Rand's heroes did?
You do know that Greenspan was part of Ayn Rand's circle years ago, don't you?