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Ear to the Ground

Greenspan Defends the Fed to Meltdown Commission

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Posted on Apr 7, 2010
Greenspan
AP / J. Scott Applewhite

Former Federal Reserve Chairman Alan Greenspan testifies Wednesday before the Financial Crisis Inquiry Commission.

Former Fed chief Alan Greenspan faced the proverbial firing squad, or in this case the congressionally appointed Financial Crisis Inquiry Commission, to answer questions Wednesday about his leadership choices at the Fed with regard to some key factors that triggered the financial implosion in 2008.  —KA

The New York Times:

A particularly sharp exchange occurred between Mr. Greenspan and Brooksley E. Born, a panelist and former regulator who famously clashed with Mr. Greenspan and members of the Clinton administration over derivatives regulation — and lost that battle. In tough questioning on Wednesday, Ms. Born called on Mr. Greenspan to defend his longtime deregulatory bent.

“You appropriately argue that the role of regulation is preventative,” she said. “But the Fed utterly failed to prevent the financial crisis. The Fed and other banking regulators failed to prevent the housing bubble, they failed to prevent the predatory lending scandal, they failed to prevent our biggest banks and holding companies from engaging in activities that would bring them to the verge of collapse without massive taxpayer bailouts.”

“Didn’t the Federal Reserve fail to meet its mandates, fail to meet it responsibilities?” she added.

Mr. Greenspan replied that there was a failure: an underestimation of the “state and extent” of financial risks and the ability of private counterparties to assess them, and he said the banking system had been undercapitalized for 40 to 50 years.

“That has to be adjusted,” he added. “But the notion that somehow my views on regulation were predominant and effective at influencing the Congress is something you may have perceived. But it didn’t look that way from my point of view.”

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By Grant, April 9, 2010 at 10:02 am Link to this comment
(Unregistered commenter)

REF: oldnyt923

Yes, Brooksley Born is a true American hero in my book. What goes around comes around.

I pray she prevails and brings these cunning criminals and traitors down. Damn their eyes!

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By Inherit The Wind, April 9, 2010 at 4:40 am Link to this comment

Grant, April 7 at 7:55 pm #
(Unregistered commenter)

Greenspan has always reminded me of Chancy Gardner portrayed by the amazing Peter Sellers in “Being There.”

Greenspan can spout cryptic platitudes all day and have politicians scratching their heads. Well, not anymore. He was puffed up by the high priests in The Fed and is always worked before.

Those Cohens have this nation by the short hairs and won’t let go until they have every last sheckle. They will not leave anything on the table.
*************************************************

Thanks. I now know a new code word you neo-nazis use for Jews: “Cohens”.  Your use of “sheckle”(sic) confirms it.

It amazes and saddens me how, at a progressive site like Truthdig, so many right-wing radical bigots show up.  You should hook up with Omop.

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By Grant, April 7, 2010 at 4:55 pm Link to this comment
(Unregistered commenter)

Greenspan has always reminded me of Chancy Gardner portrayed by the amazing Peter Sellers in “Being There.”

Greenspan can spout cryptic platitudes all day and have politicians scratching their heads. Well, not anymore. He was puffed up by the high priests in The Fed and is always worked before.

Those Cohens have this nation by the short hairs and won’t let go until they have every last sheckle. They will not leave anything on the table.

Report this

By oldnyt923, April 7, 2010 at 11:53 am Link to this comment
(Unregistered commenter)

Brooksley Born should be Secretary of the Treasury, and not Geithner.

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By cmarcusparr, April 7, 2010 at 11:07 am Link to this comment

For Alan Greenspan to say that he was “right 70 percent of the time” is like a drunk driver who, after killing pedestrians, smashing head-on into other cars and causing mayhem, says, “But I was driving okay before the accident.”

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