Alan Greenspan said something about the budget deficit on Tuesday.
The reason this is "news" is because it is shocking that Alan Greenspan is still allowed ever to speak publicly about matters of importance, when the national interest would perhaps be better served by having Alan Greenspan carted around the United States in stocks, giving citizens the opportunity to hurl tomatoes at him.
What ever did the august former chairman of the Federal Reserve say about the budget deficit this time? Speaking at the Bloomberg Washington Summit, he declared that the "worst mistake" President Obama made was not embracing the deficit-cutting recommendations of the Simpson-Bowles Commission "right away," reports Jeffrey Sparshott of the Wall Street Journal.
Hopefully the president will treat this piece of advice with the seriousness it deserves, considering the track record of prescience that defines Alan Greenspan's career.
Let's all climb into the Huffington Post Time Machine, shall we, and return to the halcyon days of early 2001, when President Bush the Younger, freshly installed in the White House, was pushing for giant honking tax cuts.
What do we see over there on Capitol Hill? Why, it's Alan Greenspan, warning Congress of the grave national emergency of having budget surpluses "as far as the eye can see." Barely pausing to question the likelihood of that forecast, he told Congress that it needed to head off this looming crisis of too-much-money-having immediately. Preferably with -- you guessed it -- giant honking tax cuts.
Congress passed those tax cuts, a huge step in erasing those budget surpluses, which not only disappeared quickly but turned just as quickly into nightmarish deficits.
About two years ago, Greenspan allowed that maybe we should go ahead and repeal those tax cuts he had been instrumental in passing. But he didn't confess to having made a mistake in pushing for those cuts, based on a short-sighted confusion of tech-bubble-era tax receipts for a permanently higher level of productivity and worker income (not to mention sheer political hackery). Instead, he said that both positions were perfectly consistent. He hates both surpluses and deficits equally, he told the New York Times.
He is now deeply concerned about the evils of budget deficits because those deficits now exist, you see. He told the Times that these deficits could even bring on a financial crisis, maybe one even worse than the 2008 financial crisis that he utterly failed to see.
Greenspan would like us to believe that he saw that crisis coming, too. A couple of years ago, right around the time he was saying the Bush tax cuts needed repealing, he wrote a paper for the Brookings Institution called, simply, "The Crisis," in which he discussed the causes of the global financial crisis.
He suggested that nobody could really have seen the crisis coming, although he also recalls sagely warning his colleagues that too-high housing prices wouldn't last forever.
He said nothing about that danger publicly, Paul Krugman reminded us at the time. Instead he said stuff like "a national severe price distortion seems most unlikely in the United States."
He also pushed hard against regulation of the derivatives, including credit default swaps, mortgage backed securities and collateralized debt obligations, that nearly brought down the financial system.
"The regulation of derivatives transactions that are privately negotiated by professionals is unnecessary," he said in one of these infamous proclamations, refuting the worries of then-Commodity Futures Trading Commission chief Brooksley Born. "It hinders the efficiency of markets."
In fact, he added elsewhere, such derivatives had made the financial system "far more flexible, efficient, and hence resilient." Eh, maybe not so much.
So remind me again why Alan Greenspan is still giving speeches to anybody other than pigeons in the park?
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.