Alan Greenspan: Too Much Government “Activism” Hobbling Economic Recovery

Hey, that’s what I’ve been saying all along!  But do they listen to me?  No-o-o-o-o!—Nor will the commies in D.C. listen to Alan Greenspan any more than they would me:

Greenspan Says Government ‘Activism’ Hampering U.S. Recovery
By Scott Lanman – Bloomberg

Former Federal Reserve Chairman Alan Greenspan said a surge in U.S. government “activism,” including fiscal stimulus, housing subsidies and new regulations, is holding back the economic recovery.

Increased bond issuance by the Treasury Department crowds out borrowers with the weakest credit ratings, Greenspan said in an article in International Finance, published on the Web today. At least half of the shortfall in companies’ capital spending “can be explained by the shock of vastly greater government- created uncertainties embedded in the competitive, regulatory and financial environments” since the failure of Lehman Brothers Holdings Inc. (LEHMQ) in 2008, Greenspan said.

Greenspan’s conclusions fit with his long-held free-market ideology and may aid Republican lawmakers who argue that cutting federal spending now will help spur job growth. Critics including members of the Financial Crisis Inquiry Commission have said Greenspan’s failure to regulate the mortgage market last decade helped fuel the housing bubble whose bursting precipitated the financial crisis.

Um…  So what they are saying is that after the government refused to rein in Fannie Mae and Freddie Mac while at the same time passing legislation which forced banks to assume risky housing loans in the guise of helping “minorities,” Alan Greenspan should have stopped them all by himself with no help from Congress or the Senate?   Um…  Some of us actually do have a long-term memory.  For years, Alan Greenspan tried to warn Congress and the Senate about Fannie and Freddie.

[CLICK HERE for a 2005 transcript of Greenspan’s incredibly prescient testimony before the Committee on Banking, Housing, and Urban Affairs – U.S. Senate]

[If you want the watered-down crib notes, CLICK HERE for a 2005 article from CNN]

But, his warnings fell on deaf ears and the government continued to pump up Fannie and Freddie.

Now, Greenspan is getting blamed by the Financial Crisis Inquiry Commission (FCIC) for supposedly doing nothing?  Gee, just who is this Financial Crisis Inquiry Commission?  Oh, that’s right;  the Obama created that little entity in 2009 when he signed into law the “Fraud Enforcement and Recovery Act.”   Unsurprisingly, six of the ten members on the FCIC’s board were appointed by the DemonRats.  And, in yet another unsurprising turn of events, they blamed just about everything on the Bush administration.  You know, the same administration that tried to get Congress to clamp down on Freddie and Fannie, only to be derailed by Barney “the Gay Dinosaur” Frank and his legion of DemonRats.

Here’s a video that helps put it in perspective:

Okay, vein bulging rant over.  I return you now to the article:

Much intervention turns out to hobble markets rather than enhancing them,” said Greenspan, 84, who was appointed Fed chairman by Republican President Ronald Reagan in 1987 and served until 2006. “Any withdrawal of action to allow the economy to heal could restore some, or much, of the dynamic of the pre-crisis decade, without its imbalances.”

Explore posts in the same categories: Economics, Economy

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