Who are you and what have they done with the real Alan Greenspan?

Commentary By Ron Beasley

Apparently a near depression on his watch was enough to make Alan Greenspan rethink his Ayn Rand roots and make him sound more like Thom Hartmann. 

Greenspan Says U.S. Should Consider Breaking Up Large Banks

U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.

Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.

“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.

“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.

We can only wish he had seen the light a few years ago.  The mantra of many of us has been "if they are too big to fail they are too big".  The big banks - CITI, US Bank, Bank of America - should have been allowed to fail and then nationalized and broken up.  Instead they were bailed out and allowed to get even bigger.  Too bad no one will be listening to Greenspan now.

Comments

[John Ballard]

He may be having a McNamara moment. A few months back I came across a fascinating factoid. Prior to being appointed Fed Chairman where he was able to charm a string of administrations into keeping his job, Greenspan headed a study committee looking at Social Security and its future.

Whether there is any connection I have no idea, but soon after that was when Congress set up the Ponzi scheme euphemistically called a "trust fund" whereby payroll taxes collected for Social Security streams into the general revenue and is pissed away with the rest of the money, replaced by special "bonds" earmarked for future use for Social Security needs. I think this arrangement has Greenspan's fingerprints all over it but I leave it to some enterprising investigative journalist to prove me wrong.

Payroll taxes have exceeded the needs of Social Security for most of our working lifetimes, yours and mine, and the excess has been spent for other purposes thanks to this arrangement. The notion of saving for the future, so important for you and I, is a quaint, provincial idea to many of Washington's and Wall Street's Very Smart People, you know.

[is ayn rand still dead]

why is this little azzklown still in the news ???

he is so thoroughly and completely discredited and shamed that he should just go away and do us all a big favor.

jeebus