Where Does the Buck Stop? Not Alan Greenspan's Desk!
When Alan Greenspan -- the man who was arguably more responsible than any other for the Great Recession -- stepped in front of a congressional committee in April, we had no idea how darn entertaining it would be. Entertaining, that is, if you are entertained by the sight of an old man attempting to rewrite history with a bottle of White-Out.
Originally published on April 9 -- The devil didn't make Alan Greenspan miss the credit crisis -- but everyone and everything else did, if you believe the former Fed chief.
Appearing before a congressionally appointed commission investigating the financial crisis, Greenspan scatter-shot blame across space and time Wednesday, always remaining careful not to let any of it bounce back and hit him in the briefcase. In his prepared statement, Greenspan left no stone unturned in his search for the true cause of the crisis -- except, of course, the rock he was hiding under.
First, he blamed "the fall of the Berlin Wall," which he said discredited and widely displaced central planning by competitive markets. Then he pointed the finger at China's inability to "keep up with the surge of income" which caused the savings rate of the developing world to soar. That mix of glasnost and a glut of Chinese savings ultimately led to a fall in global real long-term interest rates and eventually a U.S. housing bubble.Got that? The commies, well, former commies, caused condo prices in Miami to triple overnight. Greenspan was just there for the ride. But that was just the beginning of the Maestro's symphony of denial. Greenspan then proceeded to accuse in no particular order: Wall Street executives, government regulators, Fannie (FNM) and Freddie (FRE), Congress, rating agencies and subprime securitizers -- and that was all before the question-and-answer portion of the hearing! When Q&A time finally arrived, Greenspan was asked by the commission's chair Phil Angelides if he should bear any blame for the subprime crisis. Greenspan responded that he was "right 70% of the time, but I was wrong 30% of the time and there are an awful lot of mistakes in 21 years." Add one more mistake to that tally, Alan. Your revisionism is 100% wrong. TheStreet Says: To be fair to Greenspan, Bob Rubin's testimony on Citigroup's (C) failure the next day was almost equally pathetic. Never before has somebody been paid so much for doing so little.
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