Mr Greenspan, Will You Shut Up At Some Point?

Alan “easy credit” Greenspan, former chairman of the US Federal Reserve, came back with declarations on the financial times. Here are some of them, together with my reply.

“There may be numbers of banks and other financial institutions that, at the edge of defaulting, will end up being bailed out by governments.” Maybe the governments should decide on that and not you? You have already done a decent amount of damage to the world economy, haven’t you?

“…, the price of equities worldwide will determine whether the international financial system can maintain a modicum of stability as it eases out of its credit crunch … ” Of YOUR credit crunch, it’s you who made it happen. It’s you who caused the housing boom and bust which spiralled into this crisis.

“The optimistic case rests on the business world beyond finance.” That’s because there is a lag between financials and corporate business, everyone agrees on that. Many think the crisis is spreading into non financial corporate now.

“The cause of our economic despair, however, is human nature’s propensity to sway from fear to euphoria and back, a condition that no economic paradigm has proved capable of suppressing without severe hardship” No, the cause is your attitude towards investment banking, banks had to be monitored whereas you flooded the money market with free cash for them to invest into any kind of Frankenstein product. You should have hiked rates in 2003-2004 which you didn’t because of the elections, to make a favour to Mr “Bomb The World” Bush. Everyone knows this story, stop telling lies to the people.

“Regulation, the alleged effective solution to today’s crisis, has never been able to eliminate history’s crises.” Neither has deregulation, and deregulation has brought the financial system to its knees. Because of you Mr Greenspan, and your easy credit manners. Tell the poor people in third world countries trying to make a profit from agriculture, tell them about deregulation, see what they answer. Did you ever speak to them? Or maybe you only speak to Wall Street CEOs?

“A financial crisis is heralded, in fact defined, by sharp discontinuities of asset prices. The crisis must thus be unanticipated. The fact that risk was heavily underpriced for much of this decade was broadly recognised in the financial community, but the timing of the sharp price correction was nonetheless a surprise” Lies Lies Lies Lies Lies Lies Lies Lies Lies … Many people warned about it long before. This is a bit like hearing people saying that the 9/11 attack was a surprise. It’s the end of the lies Mr Greenspan, Internet is here, people have access to informations now, the right information, not the CNN and what you want us to listen to.

“We may not easily confront or accept the price dynamics of home and equity prices, but we can fend off cries of political despair which counsel the containment of competitive markets. It is essential that we do so.” This crisis is not about competitive markets. What we need is not containment. What we need is the rule of law. People have been cheated. The financial system should be rewritten. And regulated. Not contained, regulated, which is not as of now.

“The remarkably strong performance of the world economy since the near universal adoption of market capitalism is testament to the benefits of increasing economic flexibility” Increasing flexibility, not complete. Ask to people in East Asia about what happened in 1997 and see if the same happened to China. China hasn’t embraced this TotalMarketModel and yet it has bought out Washington in 10 years.

“In reality, the past decade has seen mounting global forces (the international version of Adam Smith’s invisible hand) quietly displacing government control of economic affairs.” Yes, thanks to people like you who are trying to overrule governments and laws.

“Since early this decade, central banks have had to cede control of long-term interest rates to global market forces. Previously heavily controlled economies – such as China, Russia and India – have embraced competitive markets in lieu of bureaucratic edict. The danger is that some governments, bedevilled by emerging inflationary forces, will endeavour to reassert their grip on economic affairs. If that becomes widespread, globalisation could reverse – at awesome cost.” Lies Lies Lies Lies Lies Lies Lies …

Stop Monetarism. These people are fundamentalists. No difference with Bin Laden.