The premise failed in the summer of 2007, he said, leaving him "deeply dismayed."
In other, un-Greenspan-like news, he told the Financial Times that he supported the nationalization of banks.
So there you have it: Alan Greenspan supports the nationalization of banks.
Now believe me when I tell you that some of what follows is a spoof that purports to be commentary that matters concerning Alan Greenspan and the part he allegedly played in the collapse of the modern world economy.
Trouble is I just can’t remember the name of the author.
But here goes: an author whose name I can’t remember speaks thusly:
"I formally propose that Alan Greenspan, former Chairman of the Federal Reserve, be considered for the Nobel Prize. Not for the prize in economics, a field in which Mr. Greenspan has shown a very limited grasp, but for the prize in physics.
"His remarkable accomplishment is related to the invention of the world’s first perpetual motion machine. Many physicists (and a few economists) claim that a perpetual motion machine is impossible, but Mr. Greenspan simply shrugs them off, retorting that their "representation of reality is at fault" and insisting that all his speaking engagement fees are paid for in gold.
"The perpetual motion machine, which Mr. Greenspan spearheaded against all odds, works according to the following principle.
"Countries with substantial trade surpluses with the US (China, Japan, Korea) realize the importance of the American market as the outlet for their export-oriented growth model. In order to maintain favorable conditions and perpetuate this paradigm, these countries have established the largest buyer-financing scheme in history, which is putting credit cards to shame.
"By buying American liabilities (mainly bonds and treasuries) the flow of capital from Asia has helped maintain the value of the US dollar.
"This – in conjunction with low interest rates pushed by the Federal Reserve and lax credit – propelled the inflation of American assets, mainly real estate. In view of the growing paper value of their assets, consumers have been encouraged to borrow against them. Consequently a large share of this borrowed money went into consumption. Home equity loans were taken to pay for credit cards, which were used to pay for cheap imports.
"In addition to his work on the perpetual motion machine, Mr. Greenspan’s contribution to literature should also be considered for this prestigious award.
"Notably his invention of a completely new language called FedSpeak. Linguists are consistently amazed by this language’s ability to say absolutely nothing while maintaining an illusion of substance, authority and foresight.
"FedSpeak has now become the standard language of central banks and many governmental agencies. Mr. Greenspan is, however, engaged in a legal battle with the estate of the novelist George Orwell over allegations that FedSpeak is flagrant plagiarism of NewSpeak.
"Following in Greenspan’s footsteps, the current Chairman of the Federal Reserve, Ben Bernanke, is also fully committed to revolutionary advancements in physics.
"An expert on the Great Depression, Bernanke – whose theoretical knowledge about economic hard times is becoming more practical with each passing day – is expanding the technology of the perpetual motion machine with his principle of anti-gravity and is currently applying it to financial leveraging (or bailouts).
"If this machine is ultimately successful it will truly be possible to create wealth out of thin air and an era of never-ending prosperity will unfold.
"The Central Bank of Zimbabwe, however, is contesting Mr. Barnanke’s claim, stating that it has been actively involved in the experimentation of this radical technology for several years with stupendous results. But while every citizen of Zimbabwe is now a multi-billionaire, nobody is wealthier for it.
"When contacted to comment, Mr. Invisible Hand stated that contrary to popular and political doctrine, there is no free lunch and that people should live within their means, save for a rainy day and stay away from Ponzi schemes. He also stated that currencies are too serious a matter to be left in the hands of central banks…"
So there you have it folks – a perpetual motion machine that works.
The fine print reads: MADE IN AMERICA.
That these are hard times is no longer a matter that attracts serious debate. And for sure, that these times are harder for some than others is also clear to the point of being cruel.
Sadly, most of the people who are now catching hell just happen to be the same kind of people who have become – after long practice and preparation – experts in the arts and sciences related to catching hell.
The truth however has another face; this one being the mask that is worn by some of the gurus who boasted that these could be the best of times that ever were – and ever could be.
Here my reference is to that crew of smart ones who would chat and prattle on and on – sometimes to ad nauseam- about the magic that they said existed in the market place.
And thereafter, some of them – like the indomitable Alan Greenspan – would chat some delightfu nonsense about invisible hands.
And the hungry crowds would thereafter blame themselves for the vagaries of a market and its magic that always seemed to pass them by.
And then there would be some other delightful crap about hard work, sweat and brow. And then, the poor would work even harder – all the while waiting for the day when stones would be turned into bread, angels would deliver the news and things would be well on earth as it is in heaven.
Obviously I jest.
Obviously, Bernie Madoff was not jesting when he made off with the people’s money. And for sure. George W. Bush –hinmself neither butcher or Ronald Wilson Reagan was not jesting when he talked about weapons of mass destruction.
Indeed, there is no need to jest in a time when jobs are being lost, honest people are eating mud and when widows and orphans are being ripped off – and when some who know better chat about markets, magic and invisble hands.
Now that I have gotten some of this bile off my chest and out of my innards, please note the following news release. It concerns former U.S. Federal Reserve Chairman Alan Greenspan who has said, "…that the global recession will "surely be the longest and deepest" since the 1930s, adding that the Obama administration's Troubled Asset Relief Program will be insufficient to plug the yawning financial gap.
"Since the collapse of Lehman Brothers in September, we have been exposed to the most rapid and unremitting set of gloomy statistics that I have ever seen," the former Fed chairman said a meeting of the Economic Club of New York.
I am told that, the same Greenspan later tagged the current crisis a "once-in-a-century type event."
My Lord, what a time this one just happens to be.
And yet, the fine print reads: MADE IN AMERICA.
