Mr. Greenspan’s euphemism for dysfunctional is “complex.” His op-ed says what priests or nuns tell parochial school pupils who ask about how God can let so many bad things happen here on earth. The answer is simply to say: “God is too complex for you to understand. Just have faith.”
– Michael Hudson
Fundamentalists never change their stripes and the contrition on display from even the most thoroughly disproven ideologues is almost never sincere.
Alan Greenspan, having changed the Fed’s mandate from full employment and economic stability to asset price appreciation on the fly, is only really doctrinaire about one thing: Deregulation. He f***ing loves it. He’s admitted to having found “a flaw” in his “the market knows best” doctrine in the wake of the 2008 Greenspan-led crash, but now he is taking that mea culpa back.
In a killer piece from the weekend, Michael Husdon looks at how Greenspan is back to his regular job of pushing the Ayn Rand agenda with a hot, new angle – that modern financial markets are too complex for laws anyway. It’s farcical to the nth degree.
From Credit Writedowns:
But the past two or three years evidently have given Mr. Greenspan enough time for a re-think. In Wednesday’s Financial Times (March 30, 2011) he returns to his old job proselytizing for deregulation. His op-ed, “Dodd-Frank fails to meet test of our times,” is a mea culpa to his co-religionists for his apostate 2008 mea culpa. “The US regulatory agencies will in the coming months be bedevilled by unanticipated adverse outcomes,” he warns, “as they translate the Dodd-Frank Act’s broad set of principles into a couple of hundred detailed regulations.” The Act “may create … regulatory-induced market distortion,” because neither lawmakers nor “most regulators” understand how “complex” the financial system is.
Dodd-Frank has plenty of flaws and of course there will be unintended consequences, but what are the unintended consequences of a “trust me, it’ll work out” oversight policy? The banks had it all and screwed it up. Leverage exemptions, derivatives trading in a vacuum of oversight of any kind, the repeal of Glass-Steagall – you name it. And look what they did with all of that “Free and Unfettered” market goodness!
Alan, your senility is showing.