Allen,
this is totally off topic and since I am leaving to retrace your recent footsteps tomorrow, I don't even have time to compose an equally long response.
However, I am compelled to point out that Greenspan's ego and incompetence cannot be overlooked as the major contributing cause of this mess. In simple terms, his biggest problem was he over manipulated. Through out his tenure, if we had hired the shoe shine boy down the street, who had no idea what the Fed Reserve does, he probably couldn't have done a worse job than Greenspan by just doing nothing.
Greenspan's sense of self importance made him mumble jumble to captive audiences all over the world, as if his jaw boning carried any substance.
Bottomline:
1) Greenspan sold out to bail out LTCM, lowering interest rate in the face of irrational exuberance.
2) tried to jaw bone down the wealth effect when he could have at least, albeit symbolic, raise margin requirements during the wild internet bubble.
3) creates an atmosphere of confusion, which is exactly contrary to one of the major functions of the Fed Reserve.
Maestro was a good book in a sense that it confirmed Greenspan's dictatorial mentalilty, assuming most of Woodward's accounts are factual to some extent. Woodward, unfortunately, appeared to have a relatively shallow understanding of basic economic principles and missed the point in numerous occassions.
Now that I got that off my chest, better go pack.
Ramsey
ps had to rush so please excuse grammatical and spelling errors |
