Not really a flame. But from your tone I sense the opinion that everyone was invested in the hyped.com stuff and its various components and the gross overvaluation of this segment of the market had to be killed, rather than just let it die on its own, in its own time.
It is a given that many businesses (stocks) were grossly overvalued. Was that something that occurred from monetary policy? Or was it something that occurred from greed, and momentum investing, ridiculously blind following of analyst's even more ridiculous ratings and price targets?
What Greenspan did was target this "wealth". What first occurred was investors sold almost EVERYTHING ELSE down from a 20 PE to an under 10 PE and under net asset value in many cases. See WCOM, See T, See LPX, See AMAT, on and on and on. Was this his intended results? To punish the responsible investors who invested in real companies, with real earnings, and real tangible assets by having them incur 50% losses? Was this smart of Greenspan? Were the investors in these type stable companies experiencing irrational exhuberance? Surely not.
What secondly occurred was the capital markets were shut down to fledgling technologgy companies trying to bring new products online or compete with old established companies. Is this productive? Does killing competition and stifling funds necessary for innovation prevent inflation? Or does it allow inflation to exist and persist? Since NPNT, RTHM, COVD are essentially under, will Big Phone Company be offering you dsl at competitive prices? Nope. Was this what Greenspan intended?
Can or could the middle class afford the interest rate increase that caused another $100 for house payments, another $100 for car payments? Throw in gas at $1.50, throw in heating costs which have escalated, throw in higher insurance rates, higher medical costs, lower profits to small business owners, etc , etc. Is this who Greenspan targeted? Because that is who he hit, right square upside the head with a two by four. These people are not mad at him over their stock market losses, but instead over their everyday losses and loss of purchasing power for just the life necessities. They'll be mad over their stock market losses when it comes time to retire and they discover the hit their 401k took this year.
Now tell me again why Joe Middle Class shouldn't be mad at Greenspan and blame him? |
