Greenspan on the Hill: “Don’t Blame Me” (Again)
Greenspud was on the hill today and tried to distance himself from any responsibility for helping the banks rob you in the broad daylight.[Via NY Times]
In his testimony, an unflinching Alan Greenspan fended off a barrage of questions about the Fed’s failure to crack down on subprime mortgages and other abusive lending practices during his lengthy tenure.
He pointed out that the Fed had warned about subprime lending and low-down-payment mortgages in 1999, and again in 2001. And he argued that if the Fed had tried to slow the housing market amid a “fairly broad consensus” about encouraging homeownership, “the Congress would have clamped down on us.”
He added: “There is a lot of amnesia that’s emerging, apparently.”
Remember I posted a Frontline video earlier about how this Bozo (Greenspan) tried to marginalize Brooksley Born? He was confronted on that today by some congressmen.
A particularly sharp exchange occurred between Mr. Greenspan and Brooksley E. Born, a panelist and former regulator who clashed with Mr. Greenspan and members of the Clinton administration over derivatives regulation — and lost that battle. In tough questioning on Wednesday, Ms. Born called on Mr. Greenspan to defend his longtime deregulatory bent.
“The Fed utterly failed to prevent the financial crisis,” she said. “The Fed and other banking regulators failed to prevent the housing bubble, they failed to prevent the predatory lending scandal, they failed to prevent our biggest banks and holding companies from engaging in activities that would bring them to the verge of collapse without massive taxpayer bailouts.”
Mr. Greenspan replied that there was a failure: an underestimation of the “state and extent” of financial risks and the ability of private counterparties to assess them.
“The notion that somehow my views on regulation were predominant and effective at influencing the Congress is something you may have perceived,” he said. “But it didn’t look that way from my point of view.”
He also said the banking system had been undercapitalized for 40 to 50 years, and echoing his remarks in a recent Brookings Institution speech, noted that the only meaningful way to lessen the impact of future crises was to require banks to hold more capital, and all financial traders to hold more collateral.
Read that last paragraph again. Banks were undercapitalized for 40 years, 20 of which he was at the helm. What the HELL DID THIS CLOWN do to prevent that? Nothing!!!
Speaking of clowns, those Congress clowns ‘pretend’ to be tough on an already discredited and humiliated former Fed Chairman. Yet, in reality they are getting suckered by the bank lobbyists. Furthermore, with the exception of Congressman Ron Paul, when the Greenspud was in charge, they all salivated in singing his praise.