Alan Greenspan continues his world tour to try to save his reputation. Among yesterday’s pronouncements:
- “the Fed isn’t a magical piggy bank,”
- the current economic crisis won’t end for a while,
- Hank Paulson’s plan is idiotic
- the housing market bubble was unavoidable.
Did you catch that last one? He’s talking about the housing bubble he created.
MSNBC: Troubled by the Bear Stearns debacle, former Federal Reserve Chairman Alan Greenspan is advocating a new way of dealing with government bailouts of companies whose sudden collapse could wreak havoc on the country’s economic and financial stability.
Greenspan says Congress needs to give the government new powers to handle troubled companies to minimize any potential losses to American taxpayers. A self-described libertarian Republican, Greenspan has a reputation for being wary of giving the government extra powers. However, in crisis situations, there needs to be a clear process for handling bailouts, rather than depending on the Fed to do so, he reckons.
A high-level panel of financial officials should be given broad authority to quickly determine whether a failing company poses a sufficient threat to the entire U.S. economy, he recommends. If so, the company would be shut down.
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