Alan Greenspan Is the Definition of "Epic Fail"

Today, the former Fed chairman told George Stephanopoulos that the U.S. economy was "getting close" to the point where it would stop losing jobs. Fantastic, but I have a couple questions: Why is Alan Greenspan still being asked about the economy, and what does it take, exactly, to become a discredited figure in this country? If epically failing, as Greenspan has failed, doesn't get him permanently banned from the Sunday morning talk shows, what does he need to do in order for people to stop asking his advice?

When Greenspan took over at the Fed in 1987, the total outstanding US home mortgages stood at just $1.82 trillion. During subsequent years, the total outstanding mortgages increased exponentially. By 1999, the total of outstanding mortgages in the US was $4.45 trillion. By 2004, that figure rose to $7.56 trillion. By the time 2005 rolled around, the home mortgage debt was $9.1 trillion. Some called this trend a "bubble," but not good ole' Alan.

All the while, Greenspan praised the "refinancing" of loans, the practice Michael Moore presciently declared a prelude to the subprime disaster. To silence skeptics, Greenspan told the country not to worry about the housing bubble:

...any bubbles that might emerge would tend to be local, not national, in scope... In evaluating the possible prevalence of housing price bubbles, it is important to keep in mind that home prices tend to consistently rise relative to the general price level in this country...A sharp decline, the consequences of a bursting bubble, however, seems most unlikely.

And yet there he was on the TV this morning, making new "serious" claims from his brain Ouija board because he is an "expert." Greenspan's ability to make these kinds of public predictions without fear of being pelted by rotten tomatoes is facilitated by America's proud tradition of rewarding white collar failure. A black kid busted with a dime bag of weed usually won't get a second chance to straighten up and fly right. Yet, lifelong losers like Alan Greenspan and Timothy Geithner, who became Treasury Secretary after screwing up his job at the Federal Reserve Bank of New York, continue to fail upward.

Geithner, much like Greenspan, got it completely wrong when he claimed his job was not to regulate the housing market. Geithner was one of our nation's top regulators during the subprime crisis. Yet he took no effective action, nor did he warn the American people about the housing bubble. According to economist William Black, he didn't even do anything in response to the FBI warning that there was an epidemic of fraud. Later, Geithner was rewarded with a promotion for his epic failure.

Even if Greenspan turns out to be right about unemployment, that won't somehow erase his past crimes. Occasionally making an accurate prediction doesn't airbrush the fact that Greenspan and Company destroyed the economy, millions of workers' lives, and crippled the entire country. I believe the kids call this an "EPIC FAIL." This means Greenspan doesn't get a do-over. An "EPIC FAIL" means Greenspan walks away, head hung low, and never comes back. An "EPIC FAIL" survivor like Greenspan is lucky. He gets to keep his home, and his millions of dollars, and his substantial holdings in General Electric, Abbott Laboratories, and beer makers Anheuser Busch, worth between $600,000 and $1.1 million. But at the very least, he should shut up and quietly retreat into the shadows.

Worse than the losers that keep making predictions are the people that keep listening to them. Repeating the same behavior and expecting a different result is the definition of insanity. Greenspan, Geithner, and their buddies in the cozy deregulation coterie got everything wrong, so they shouldn't be rewarded with governmental promotions and television coverage. I get that Wall Street and the government are now so cozy that politicians either fail to see the sick irony in this system of rewarding failure, or refuse to acknowledge it, but why do ordinary people still tune in to listen to this crap?

Cross-posted from Allison Kilkenny's blog. Also available on Facebook and Twitter.

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Comments

[dart79]

Ms. Kilkenny you inaccurately depict Mr. Greenspan. Remember, he is referred to as Maestro. Surely, someone who is revered by the media must be brilliant. In addition, he is on ABC. The same network that has George Will and Peggy Noonan as commentators. The man is so intelligent it is hard to understand his double talk. And surely, how could anyone predict that a Subway sandwich worker would default on three mortgages. Let the man finish his life by reading favorable press while he soaks in his bath tub. And please stop your unwarranted criticism on the other financial geniuses. We are blessed that we have Summer, Geithner and Bernancke at the helm

[BocaMom]

Isn't it amazing how you have to dig really deep to find a story on the economy? Even thought unemployment is almost at 10% with not solution in sight. What a sad state of affair for government and the media.

[rad21]

The challenge we have: How to shrink with the least human and economic impact? To put it bluntly, can economists like Nouriel Roubini, Robert Reich and others on both sides of the political divide, get top corporate management (and boards) to take a significant pay-cut, rather than lay-off their lower-tier workers. And how do we convince lower-tier workers to take a pay-cut across the board to prevent lay-off of their co-workers?

Clearly given the fiscal and management mess we are in the financial, auto, healthcare (insurance and health-delivery) and other sectors of the economy, the top management who are getting millions of dollars in pay are far from performing to their compensation. In other words the economy and public are not getting their monies worth.

The million-dollar men and women with their spokespersons, PR machine and political hacks (all on corporate payrolls) have all along sold us spin; rather than productivity, efficiency, and quality of the goods and services they provide.

[brooklyncitizen]

Right on. We have gone beyond not punishing political criminals and moved onto rewarding them. The current administration is stacked with miscreants that have a proven history of sticking it to this country; to "we the people". It is the darkest moment in US' history mainly because of a pervasive lack of leadership and ethics in our govt. Yes even after our historic elections have that remains unchanged. THe most radical changes are happening at the grass-root level- ordinary citizens, and I don't mean whiny tea partiers.

Greenspan appearance bears out that what we get to see is nothing more than a shell game- the news circuit and the various talk shows all participate in this. There is no honest or weighty discourse to be found (with the exception of Amy Goodman who I think we need to clone).

[schatsie]

thank you for such a thoughful and cogent skewering of the Great Oz..... He should be thankful we don't have the guillotine in this country except in Texas for poor working class or just plain poor slobs....

[noamjunior]

if a sports announcer picked the Pirates to win the world series this year- think he would still be on TV?
Why do we expect lmore from our sports analysts than we do our ecconomic ones ?

[Moshe]

No consequences; no change.

No sooner did the bubble that caused this massive financial collapse pop, than the same people that were the arcitects of the current failure start rebranding and packaging the same old scams that will in time cause the next collapse.

The S&L collapse was ignored, the people that caused it got filthy rich reselling the scams that caused it after the S&L collapse, and this collapse was just the same failure but bigger.

So I say again: No consequences; no change.

How much clearer could the pattern be?

But until the people doing this are held to account, they will keep making money by pillaging our savings and the U.S. treasury.

[ILibertine]

The problem is that we fail to accurately brand these individuals as criminals. Oh, cowboys or some diminutive term - that they are somehow exonerated, even through the worst manifestations of Capitalism, and are merely well-meaning players who mistakenly caused world class collapse and unprecedented taxpayer theft.

Until we begin to reflect upon such individuals as thieves, robber barons (an old term that doesn't sound that outdated lately) and deceivers, hiding behind a presumption of expertise in spite of the phenominal mismanagement they have so diligently exhibited, I doubt we, as a society so enamoured oif brands, can accurately view such persons in their true light and, thereby, act toward them accordingly.

[schatsie]

I heard some lying theiving Republican on C-SPAN saying that the rich needed more tax cuts including a capital gains cut.....No more talk of the flat tax when you can actually pay less than the regressive payroll tax.....what a mess.

[knosiswar]

Yeah, Your sooo right Allison, your the greatest EVER, Yeah, for being YOU.

[dtlewis]

Those who conclude that the outcomes stemming from the conduct of monetary policy as occurred over the past two presidential administrations are failures fail to recognize that modern conservatives intended precisely those outcomes we are experiencing now. Their policies we're NOT failures in their eyes but rather stunning successes. They bankrupted our treasury virtually guaranteeing there would be no resources remaining to fund social programs of any sort. Elimination of Social Security and Medicare have long been the primary target of the right. That these racketeers were able to steal every available dollar from the working class first through the frauds of the housing bubble then immediately followed by the banking bailout and now the stimulus package is a magnificent win for these folks. Don't believe it? Look where the money is going if you can get a look. Just the fact that the banks refuse to report how they're using the TARP money is evidence enough for me. Wonder how many on the boards of directors of the major Wall Street firms serve concurrently on the boards of the major for-profit healthcare providers. I suspect far more than most realize.

[BluestateGuyInTX]

Your analysis neglects to mention the possibility that we take the money we need to fix this country from the wealthy who stole it in the first place. It also fails to mention that a bankrupted treasury has no money for war either and that can't be a happy thought for the conservative movement.

[Robert Cantor]

I am not looking for an argument but I have to agree with dtlewis - the health care public option will probably fail WHILE we escalate the war in Afganistan. I wish your analysis was correct - I fear dtlewis is correct.

[werbenjagermanjensen]

Actually I recall this question being answered in "Capitalism: A Love Story," in which one of Moore's interviewees says that the "experts" are hired, not for giving sound advice but for giving the answers that the people they're advising want to hear. In Greenspan's case, it's for barfing up opinions for people who think that Ayn Rand's regurgitations of Leo Strauss are the last word in public policy.

[zoe27]

The audience would probably be too limited, but I would love for Michael Moore to fully tackle the influence of Rand's "philosophy" on society.

[Gudrun]

OH yes, that would be fantastic!

[NickHP]

Yeah, his policies stank, were destructive, and there is no recourse now for the rest of us. But when confronted with the results he was able to say that his complete underlying theory were discredited. Then he was able to jump to a new set of ideas.

He is obviously capable of doing much more in-depth analysis than most of the rest of us can. Yes, even if he was dogmatic for a long time and we look at his pronouncements with suspicion. When it comes to his credibility, we need to evaluate his comments through the filter of our own understanding.

[Robert Cantor]

so, Al was was incredibly wrong - acknowledges he was wrong and therefore he is likely to be right?

[OhComeOnNow]

100% correct!

[seawolf77]

Greenspan did what he had to do to keep the party going just like we all wanted him too. Nobody wants to be the guy who pulls the plug on the band. Nobody wants to be that guy. So HOW!!!!!! are we ever going to prevent it from happening. We are not. So quit dreaming. This is boom and bust capitalism, is all it will ever be, so get used to it. Finger in your face, take your screwing boy, I told you not to trust him crapola. Welcome to America.

[ustab]

Way to go, Allison. Spot on, as always.