Rep. Bernard Sanders vs Alan Greenspan

[FRED]

While Greenspan is out pitching his book on TV where he portrays himself as a free market warrior we figure we'd post a brief antidote.

[Rajiv]

Re: Rep. Bernard Sanders vs Alan Greenspan

Let me paraphrase Greenspan -

As long as I can continue printing money and find suckers to accept that money as payment in full -- then US is still rich -- even though we make nothing or have nothing to sell!

Taken from that perspective, Helicopter Bernanke is a genius! The dollar will tank - leading to inflation -- then Americans will be forced to become productive again since they will be able to buy nothing! The good old Buy vs Make trade off going in the other direction

[akrowne]

Re: Rep. Bernard Sanders vs Alan Greenspan

Wow, what a club-for-growth weasel answer. Forget jarring domestic turmoil and inequities found nowhere else in the advanced world -- we have ... technology.

Or had. Now its probably more accurate to say that Asia does (when was the video -- 2004?)

But its ok; we still have plenty of billionaires. I know that's why I sleep soundly at night.

[randy12345]

Re: Rep. Bernard Sanders vs Alan Greenspan

As long as you are pulling out old C-Span clips, I saw a gem of a clip in December 2005 on C-Span2 in a hearing regarding the consumer bubble. A congressmen (it might have been Sarbanes) said (rough quote) "Mr Greenspan, I've been doing some research and over the last 150 years in the U.S. we've had 2 major credit/consumer bubbles. The 1920's bubble and the 1870's bubble. Following these bubbles, nobody cared about the fact that the stock market declined 80% because we had 35-50% of all Americans homeless and living on the streets where their only source of food was government soup lines. We now find ourselves in a credit bubble that is larger than either of those preceeding bubbles. It would appear to me that the next 10 years in the U.S. will bring very hard times. I don't know about you Mr Greenspan, but I'm very concerned about what lies ahead. What are your thoughts on this?"
Greenspan: (leans forward to mic) "Mr Senator, you are absolutely correct" (leans back in chair)

My jaw dropped open when I heard Greenspan say that. It was an instant classic. Since then, I've always thought that a person could start up a website which would act as a repository for brutally honest statements like the one I loosly quoted above. The website could include FED, FDIC, BIS, WorldBank, and various central bank comments which cut through the BS and expose the true economic/financial risks that exist right now as stated in their own words.

[FRED]

Re: Rep. Bernard Sanders vs Alan Greenspan

As long as you are pulling out old C-Span clips, I saw a gem of a clip in December 1995 on C-Span2 in a hearing regarding the consumer bubble. A congressmen (it might have been Sarbanes) said (rough quote) "Mr Greenspan, I've been doing some research and over the last 150 years in the U.S. we've had 2 major credit/consumer bubbles. The 1920's bubble and the 1870's bubble. Following these bubbles, nobody cared about the fact that the stock market declined 80% because we had 35-50% of all Americans homeless and living on the streets where their only source of food was government soup lines. We now find ourselves in a credit bubble that is larger than either of those preceeding bubbles. It would appear to me that the next 10 years in the U.S. will bring very hard times. I don't know about you Mr Greenspan, but I'm very concerned about what lies ahead. What are your thoughts on this?"
Greenspan: (leans forward to mic) "Mr Senator, you are absolutely correct" (leans back in chair)

My jaw dropped open when I heard Greenspan say that. It was an instant classic. Since then, I've always thought that a person could start up a website which would act as a repository for brutally honest statements like the one I loosly quoted above. The website could include FED, FDIC, BIS, WorldBank, and various central bank comments which cut through the BS and expose the true economic/financial risks that exist right now as stated in their own words.

That's a very good idea. We've been mining FOMC minutes for a while. How's this quotation of Greenspan, FOMC meeting minutes from March 22, 1994 (pdf):

"When we moved on February 4th, I think our expectation was that we would prick the bubble in the equity markets. What in fact occurred is that, as evidence of the dramatic shift in the economic outlook began to emerge after we moved and long-term rates began to move up, we were also clearly getting a major upward increase in expectations of corporate earnings. While the stock market went down after our actions on February 4th, it has gone down really quite marginally on net over this period. So what has occurred is that while this capital gains bubble in all financial assets had to come down, instead of the decline being concentrated in the stock area, it shifted over into the bond area. But the effects are the same. These are major capital losses, which have required very dramatic changes in the actions and activities on the part of individuals and institutions."

"So the question is, having very consciously and purposely tried to break the bubble and upset the markets in order to sort of break the cocoon of capital gains speculation, we are now in a position—having done that and in a sense succeeded perhaps more than we had intended—to try to restore some degree of confidence in the System."