Let's get serious for a minute. I really quite seriously think people are off their rockers to blame Alan Greenspan for their decisions to do stupid things = borrow a whole lot of money to buy a house which was over priced and that they couldn't afford. Similarly, the lenders were silly. Irrational exuberance and other mental disorders are not amenable to reason or to Alan Greenspan's ministrations.
Try reasoning with a religious person. Their brains are lacking receptors. They believe and they want to believe. Reasoning, facts, logic etc don't enter into it. It's an emotional state.
If you point out that there are four religions all claiming to be the one true religion, [they all make that claim but for the sake of reasoning, let's just consider four], they all consider their's is obviously the correct one and the other believers are deluded. No error message flashes in their heads.
It's social animal tribalism, Stockholm Syndrome, alpha male dominance hierarchy etc, which are part of human evolutionary pathways from chimpanzee design.
In the same way, they are unable to see that it is their own mental processing about money, debt, price which was at fault. The believed in slogans, as only true believers can believe, such as "houses always increase in price". They wanted to be part of the crowd who were all buying.
What is scary is such believers don't just change their minds. The management of Globalstar didn't change their minds when it became obvious that their pricing ideology was dud. Jim Jones and his cult did drink the Kool Aid. The Waco crowd did die in flames, [which might or might not have been set by them]. Another gang did buy Nike shoes to fly to the comet beyond Hale Bopp. Adolf killed himself in his bunker and legions of Germans died for the idiocy of the Third Reich's MADness. Japan gave up the game only after it became apparent that Tokyo could go the way of Hiroshima and Nagasaki.
As TJ has always said, the USA mob might well go feral in the midst of financial relativity theory carnage. Will the USA "true believers" pull the temple down around themselves blaming Alan Greenspan and everyone except themselves. Many already think China did it. Or maybe Japan. Or both. With Russia helping. Not to mention OPEC.
The phlegmatic British retreated gently from the majesty of the British Empire and the most glorious success ever into the British Disease and destructive socialism. England is now much as Enoch Powell envisioned with Islamic Jihad and other third world criminals creating rivers of blood. Big Brother looms through swarms of CCTV to stem the flow.
Surely you can't be serious that Alan Greenspan is to blame, even in part. It's true he kept interest rates too low for a year and was a year too slow to drop them in Y2K, but that was a minor fault. But that's a detail.
The Biotelecosmictechdot.com boom and bust were due to wild eyed irrational exuberance and yes, it was fun while it lasted. But I bought Globalstar because I thought they management would change their minds about their pricing ideology when it didn't sell at US$3 per minute and $1500 per handset. But no, they preferred to maintain their supernatural beliefs and go down with the ship.
It was not Alan's job to correctly price Globalstar, JDS Uniphase, Enron, Worldcom, Global Crossing, Amazon, Google, Yahoo!, Microsoft, Sun, Oracle, eBay and all the rest.
Nor was it his job to price houses, Lehman, Bear Stearns, J P Morgan, Goldman Sachs etc. or tell them how much they could lend to each other. That's called a market. The USSR used to run central planning of pricing. It can't work.
His job was to maintain the money and keep it the world's pre-eminent currency, while having it turn a profit for its owners [dilution and interest rates]. It still is and it still works and judging by price movements, people are wanting MORE of US$, not less.
The seriously great danger now is that people will blame somebody, anybody, other than themselves and that they are entitled to a standard of living, that car factories and lunch can be free and that the world owes them a living.
Mqurice |
