As the saying goes, "those who don’t know history are doomed to repeat it." The economic melt-down we’re in is directly related to the history of Greenspan’s tenure as Fed Chairman and the laissez-faire economic policies of the GOP. Yet, we keep repeating the same story over and over again.
So today, Former Federal Reserve Chairman Alan Greenspan testified http://www.bloomberg.com/... before the House Committee on Oversight and Government Reform. Greenspan testified that we’re witnessing a "once-in-a-century credit tsunami," but really down played his role in contributing to the crisis. He admitted to being ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected. Forecasting is an inexact science."
While forecasting may be an inexact science, regulating the market is not; but regulation is something Greenspan and the Republican economic ideologues have always strongly opposed. As Bloomberg notes, "In May 2005 speech, Greenspan said that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.'' He wasn’t the only one who was opposed to regulation and oversight. I think John McCain said it best himself,"I'm always for less regulation," he told the Wall Street Journal in March. He added: "I'd like to see a lot of the unnecessary government regulations eliminated.","I'm always for less regulation," he told the Wall Street Journal in March. He added: "I'd like to see a lot of the unnecessary government regulations eliminated."
Congressman Henry Waxman, Chairman of the Committee on Oversight and Government Reform, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.'' He added, ``You were advised to do so by many others, and now our whole economy is paying the price.'' (emphasis added)
It should be noted that Congressman Waxman deserves our support and our gratitude for doing his job and trying to hold the Fed accountable in a way not seen since Henry B. Gonzalez. not seen since Henry B. Gonzalez. I have writtenwritten on this topic before, but I think it deserves to be re-examined in light of today’s testimony by Greenspan. Former Fed Economist Robert D. Auerbach recounted the abuse and deception at Greenspan’s Fed in an often overlooked book titled, "Deception and Abuse at the Fed." "Deception and Abuse at the Fed." (Yes, I am shamelessly plugging a book endorsement here, though I receive zero financial compensation...I just think it deserves more attention.) Auerbach sums it up best when he writes, ``The Fed is regulating the very people charged with regulating it.'' ``The Fed is regulating the very people charged with regulating it.''
So if we want to get out of this economic mess, why on earth would we continue repeating the same mistakes over and over again? As Senator Barack Obama said, "This isn't 9/11. We know how we got into this mess." "This isn't 9/11. We know how we got into this mess." And his proposal to increase market oversight and accountability on Wall Street is the first step toward rebuilding confidence in our economy.
"There will be constant access to the books and accounts of our banks and other financial institutions," he said. "By law, it will reduce the debt and risk that any bank can take on. And above all, I promise reforms to prevent the kind of wild speculation that can put our markets at risk, and has already inflicted such enormous damage across our economy."
At a gut-level, I think most voters understand that McCain represents more of the same when it comes to the economic policies of the laissez-faire GOP, but it does not hurt to remind people who may still be undecided about which candidate is going to lead us out of this economic (and self-inflicted) crisis.