Saturday, September 20, 2008
The hits keep coming for former Fed Chairman Alan Greenspan, as government officials desperately try to reattach the wheels to both the U.S. and world financial system that he was instrumental in creating while more and more individuals attempt to determine the "root cause" of the current problems.
Across the political spectrum in Europe, the former fed chief's name keeps popping up when the discussion turns to "root cause", and Italy's finance minister sets the bar quite high, putting the world's most famous terrorist in the same company as the world's most famous central banker, as reported in the LA Times.
It's a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street.Over the last week, there has been an exceptionally high level of inbound traffic to this blog from Google searches with "Greenspan" as one of the search words (the blog is still #4 for a simple Google search on Greenspan, Stanley Greenspan M.D. having once again bumped me from the top 3).
The finance minister of Italy's conservative and pro-U.S. government warned of nothing less than a systemic breakdown. Giulio Tremonti excoriated the "voracious selfishness" of speculators and "stupid sluggishness" of regulators. And he singled out Alan Greenspan, the former chairman of the U.S. Federal Reserve, with startling scorn.
"Greenspan was considered a master," Tremonti declared. "Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. . . . It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis."
How could it be that we've had to come this far before people finally realize what some of us were so certain of back when the housing bubble was still inflating in 2003 and 2004?