Bedtime for Maestro
Making sense of macroeconomics—and its discredited poster boy, Alan Greenspan
The Map and the Territory:
Risk, Human Nature, and the Future of Forecasting
by Alan Greenspan
$36.00 List Price
THERE IS A DIFFERENCE BETWEEN the sexes that has always fascinated me. We women—we’re always apologizing: We could have; we should have . . . Men, on the other hand, they always have an explanation, an excuse. Even if they are, like once-celebrated former Federal Reserve chairman Alan Greenspan, standing over the violently debauched corpse of our present economy, the knife in their hands still dripping blood, there is always a reason why they didn’t do it.
They are so practiced at this art that even as they claim “I should have known,” they are, in fact, offering up all the reasons why they absolutely could never have figured it all out till it was far too late.
Don’t believe me? Let’s take the case of Greenspan, the onetime wisest of all Washington wizards of economic policy, formerly known as “The Oracle” or “The Maestro.”
Greenspan, who led the Federal Reserve from 1987 to 2006, was the great enabler of the housing bubble. Not only did he repeatedly refuse to use Federal Reserve authority to intervene in the subprime-mortgage markets, he also encouraged the bubble’s expansion, by urging Americans in 2004 to make the switch from the traditional thirty-year fixed home loans to adjustable-rate mortgages.
American households, the Maestro then claimed, were managing their debt levels well. As for that idea that the cost of housing was going up at an unsustainable rate? Pshaw. Not to worry. There’s never been a nationwide downturn, and, anyway, consumers can’t flip homes the way they can flip stocks.
Clearly, Greenspan had never read the many books in real estate guru