Does Greenspan have any personal liability for this financial crisis?
Tags: Federal Reserve + Greenspan + housing + Justice + Mortgage Meltdown
Fortune Magazine’s investigative unit recently produced a video cast entitled “Bu$ted the Mortgage Meltdown” featuring commentary by former Fed Chairman Alan Greenspan who took the defensive arguing that the current housing bust was “an accident waiting to happen.” In his words, “If it wasn’t the housing bust it would be something else.” Greenspan absolved himself of responsibility saying that: “we have been through this
type of event innumerable times over the centuries. We get to a state of extraordinary exuberance which when confronted with reality turns to unrelenting fear.” In other words, (1) his loose money policies to boost bank profits, (2) his department’s complete failure of oversight of bank lending practices, (3) his deceptive testimony that derivative contracts should not be regulated, (4) and his intentionally confusing testimony to the Congress that he has subsequently admitted was purposefully BS (in his words”Fedspeak” intended to confuse as to Fed actions) have not contributed to the financial crisis we face today. Well SB believes it’s time to rout out the malfeasance in government particularly when it occurs at the highest levels. Greenspan may successfully argue and enjoy a partial measure of immunity from certain policy initiatives, but if there is justice in the US it is time to open a full investigation as to why the Federal Reserve failed in their oversight and regulation of banks, permitted off-balance sheet liabilities in mortgage lending and derivative guarantees, and why in particular, Mr. Greenspan advocated no regulation for such unsafe activities. Indeed it is time to investigate to what degree the Chairman’s “Fedspeak” was contributory to the excesses that perpetuated the fraud in securitization and bank guarantees of mortgages sold to the public, pension plans, and sovereign governments for which the US taxpayer will now suffer the great burden of repaying those losses.
Reference: Age of Turbulance by Alan Greenspan publishe by Penquin Books
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