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.