The Reckoning : Taking Hard New Look at a Greenspan

Over the years, Mr. Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences. Full Story »

Posted by Julian Friedland - via Publish2 (Business)

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Review

Michael Bugeja
4.6
by Michael Bugeja - Oct. 9, 2008

Apart from one rather significant flaw in the writing--not defining derivatives to the extent needed to inform those unfamiliar with financial instruments--this is an enlightened, enterprising and responsible article that essentially pins the current economic crisis on the Ayn Rand-inspired policies of Alan Greenspan. The writer correctly notes how Greenspan bullied Brooksley E. Born, commissioner and chairperson of the Commodity Futures Trading Commission, which proposed regulation to monitor derivatives. I encourage NewsTrust reviewers and readers to familiarize themselves with Born who, in the male-dominated early 1960s law school milieu, graduated from Stanford first in her class and served as president of the Stanford Law Review. Greenspan, Rubin and other so-called oracular men of the Bill Clinton era told Born that she didn't know what she was doing and would cause a financial crisis. How must that have felt to a woman who was more intelligent, dedicated and, in the end, on point in her assessment that too few people were controlling too many futures and options and thus were endangering not only Wall Street but potentially everyone in a global market? The article doesn't focus on Greenspan's sexism but on his ego, which he predictably is trying to protect, along with his false legacy as "The Oracle." In the end, Greenspan will go down historically as the Fountainhead of Failure.

Both Bill Clinton and George W. Bush encouraged Greenspan's libertarian unregulated policies because they predicted low inflation and high growth--a prescription for a market that has to be manipulated to live up to its dividends and derivatives.

“Greenspan told Brooksley that she essentially didn’t know what she was doing and she’d cause a financial crisis,” said Michael Greenberger, who was a senior director at the commission. “Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.”

An argument can be made that sexism caused financial collapse.

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Michael's Rating

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4.6

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