Thursday, August 12, 2010

Alan Greenspan Should "Man Up" or Drop Out of Sight

John Stossel appropriately scolds the former Federal Reserve Chairman for blaming the financial crisis on the free market. I'll go one step farther and say that Greenspan's behavior is a reprehensible example of someone lacking the cojones to take responsibility for his mistakes. Greenspan is surely not responsible for the corrupt system of subsidies from the government-created nightmares known as Fannie Mae and Freddie Mac, but he definitely deserves the lion's share of the blame for the Fed's easy-money policy of artificially-low interest rates. Greenspan presumably knows he screwed up, which makes his attack on free markets especially despicable. The icing on the cake is that he's also sucking up to the political establishment by endorsing higher taxes. Hasn't he already done enough damage?

I'm getting tired of Alan Greenspan. First, the former Federal Reserve chairman blamed an allegedly unregulated free market for the housing and financial debacle. Now he favors repealing the Bush-era tax cuts. ...During a congressional hearing two years ago, Greenspan shocked me by blaming the free market -- not Fed and housing policies -- for the financial collapse. As The New York Times gleefully reported, "(A) humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets." He said he favored regulation of big banks, as if the banking industry weren't already a heavily regulated cartel run for the benefit of bankers. Bush-era deregulation is a myth perpetrated by those who would have government control the economy. We libertarians were distressed by Greenspan's apparent abandonment of his free-market philosophy and his neglect of the government's decisive role in the crisis. Greenspan, going beyond what even President Obama favors, calls on Congress to let the 2001 and 2003 Bush tax cuts expire -- not just for upper-income people but for everyone. ...the stupidest thing said about tax cuts is the often-repeated claim that "they ought to be paid for." How absurd! Tax cuts merely let people keep money they rightfully own. It's government programs, not tax cuts, that must be paid for. The tax-hungry politicians' demand that cuts be "paid for" implies the federal budget isn't $3 trillion, but $15 trillion -- the whole GDP -- with anything mercifully left in our pockets being some form of government spending. How monstrous!

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