This morning I was informed through a Bloomberg article that the Financial Crisis Inquiry Commission has faulted the Fed for lax mortgage regulation helping lead to our most recent financial crisis.Well, duh. Talk about the tip of the iceberg.
The article also informed me that Mr. Alan Greenspan declined to comment on the Commission’s findings, as did his spokeswoman, Katie Byers Broom. When Fed spokeswoman, Michelle Smith, was asked to comment she also declined, saying that she had not seen the report yet.
Well, duh and duh again.
Funny, isn’t it? I am sure that Mr. Greenspan did not want to comment on the Commission report because it might raise questions about the significant role he played in our current debacle. It might also raise questions regarding the significant level of consulting fees he is earning for warning us now about the risk associated with the type of Debt Buildup that he created during his realm.
How do these people keep getting away with it?
Based upon what we all know, doesn’t it make you wonder who is paying our ex-Great Economist for his advice these days? And why the television networks still bring him on for his insightful vision?
Talk about a risk factor—I think a good bet would be to “short” Mr. Greenspan’s clients. And if you don’t have any money to invest in that manner, they I suggest you join my own personal boycott of any show or network that regularly solicits Mr. Greenspan’s advice.
The truth of the matter is this: during Mr. Greenspan’s full reign at the Fed, the United States was practicing a form of “reverse” Keynesian economics and we applauded him. Not only was Mr. Greenspan jacking up our somewhat growing economy with steroids using mortgage debt, he was allowing the same thing with our National debt. In fact, the Fed was practicing so much “reverse” Keynesian economics during Mr. Greenspan’s reign that we have no room to use it now.
Why or how did we let this happen? There is one reason and one reason only. Because we defaulted our own common sense to our non-business oriented economists, who don’t know a damn thing about business, nor seemingly, the economy, itself. I say some things are too important to leave to the economists, and the most important of these things is the Economy.
Oh Boswell, you are being too harsh. Too reactionary.
Well, all I can is this. Don’t you find it rather interesting that Bloomberg News found it important enough to get an early copy of the Financial Crisis Inquiry Commission report to see what they had to say but the Fed seemingly did not?
All I can say is this–typical of our economists. Sitting high on top of their Golden Perches, people like Mr. Greenspan, Mr. Bernanke, and the Fed Governors don’t have to listen to anyone other than their own group of selectively groomed economists with like minds, who will support everything they say. And keep quiet about any opposing views.
I can almost hear the Fed talking these past couple of days in their secretive little cliquish gathering.
“The Financial Crisis Inquiry Commission report? Ah, we don’t need to worry about that. That’s just something a bunch of laymen non-economists put out, looking for someone to blame after the fact. They don’t know anything about the economy or economics. We don’t need to listen to them. After all, no one saw this crisis coming. No one other than that other crazy economist, Roubini, and history has proven that all he does is throw things up against the wall and hope something sticks. Who would want to bet on his projections? And Krugman, heck he is just as bad. We’re OK. Let’s just stay pat for a while and let this thing blow over.”
And with a couple of the above statements, I would have to agree, but I will leave the reader to select which ones.
Despite what the Fed might tell you, there were some of us that did see this crisis coming and who did try to warn the Fed of the mortgage crisis, long before it ever came to fruition. In 2005 when my concerns about Fannie Mae and Freddie Mac were presented to the supposed leading housing economist at the Fed, I was told that he thought the “private banks” would reign in their misdeeds.
Now go figure that one out. My concerns were dismissed by the Fed with hardly any consideration given to the issues that I had raised. Even though the leading housing economist at the Fed had access to all of his own esoteric data, his own knowledge of housing paled in comparison to my own, which included leading the group of business analysts who designed, developed, and then monitored the risk of $600 bill portfolio of mortgage-backed securities during and for a decade through and after the Savings & Loan crisis.
When the financial crisis finally did start becoming clear to the Fed in 2008, I again began trying to offer them my expertise and advice to them. Their response? Nada, nothing, shunned.
So when I read the last paragraph of this morning’s article that told me Bernanke and Fed Governor Daniel Tarullo are now working to redesign the Fed’s oversight and have dozens of macroeconomists, payments experts, examiners and lawyers focused on risk to the financial system, I could not help myself.
I had to sit down and right this piece for Business Insider. Some things are just too important to leave to the Economists—and that is the Economy, itself.