Greenspan's 'Ayn Rand' Philosophy was at fault, says Economist Jeffrey Sachs
source: http://blogs.wsj.com/economics/2009/10/06/jeffrey-sachs-rails-against-ex-fed-chief-greenspan/
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“The essence of the current downturn is finance,” Mr. Sachs said. “It’s a Wall Street crisis. A crisis made down the block.” He said, and “if you look under the rubble you can figure out what happened and why.”
First, “a long bout of easy credit championed by Alan Greenspan and the Fed outside of the normal boundaries of monetary policy,” which came together with “a nearly complete deregulation of the financial sector contrary to almost everything we know about the risks of a highly leveraged financial system.”
“This is flagrant irresponsibility,” he said. “This isn’t a matter of one’s market philosophy, just profound irresponsibility.” Later, though, he said Mr. Greenspan’s ideology was possibly at fault, given his “Ayn Rand” philosophy that markets take care of themselves “until he discovered the flaw of his theory later.”
Mr. Sachs also spoke harshly of the Clinton and Bush administrations. “We arrived at this cliff through the aggressively irresponsibility of two U.S. administrations in a row,” he said, accusing them of bending to the will of the nation’s biggest lobbying group — the financial industry.
“Where were the regulators? Consciously and deliberately kept out of the scene,” he said. “This led to a bubble financially that was most notable in the housing sector…and Alan Greenspan added fuel to the fire by keeping interest rates around 1%” from 2002 through early 2005.
“You get credit for stopping a Depression but I don’t want to give too much credit because the people who stopped it were the people who started it also,” said Mr. Sachs.
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- Vierotchka
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RFIDemocracy
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I am collecting material of this nature currently (no pun intended) and bookmarking it for future reference.
Freepers continue to fiercely espouse the same regressive ideology while they fiercely deny that it has anything to do with the cause of the global recession and the destruction of the same middle class that they themselves have mutually benefited from for half a century.
And, yeah, I fully recognize Clinton's role in all of this.
- 2 years ago
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RFIDemocracy
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kennymotown
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Alan Greenspan in my opinion was left in charge far too long and his ideas of keeping unemployment at between 4 and 5% are what kept wages so low for way too long that we have a populous that can't by goods and services.
- 2 years ago
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kennymotown
