The Emperor Unclothed

We’ve called him a “maestro” and an “oracle” and a “guru”.  The media adored him, the U.S. Congress genuflected before him, and the world of finance — Wall Street, the investment and commercial bankers, the funders and advisors of mergers and acquisitions, the hedge fund managers, and the boardrooms of America  — revered him as the champion of their ways to wealth.  But as we now know, Alan Greenspan was just another self-infatuated, egomaniacal blowhard.  Yes, he was certainly more dignified, more intelligent, and better educated than most in the financial community, but also more dangerously convinced of his infallibility.

We can now see Greenspan’s penchant for purposeful and consistent obfuscation, which we all winked at as some sort of impish wit, as having actually masked decisions which wreaked economic havoc on nations and people all over the world.  The irony, of course, is that the Greenspan manifesto of unfettered free enterprise governed by the self interest of the marketplace has more effectively undermined capitalism than Marx or Engels ever imagined.

As the financial community and much of corporate America staggers under the weight of greed and corruption unleashed by Greenspan and his enablers in government, as more of the middle class sinks into poverty and the poor become increasing impoverished, as the disparity between the wealthy and the rest of the world widens, even Mr. Greenspan’s wall of arrogance has cracked from the battering of the consequences of his disastrous mistakes.  With his misguided laissez-faire policies and pronouncements having produced a generation of money-crazed financial criminals and market manipulators, the “maestro” has finally admitted that he was wrong to assume that the markets would provide a rational counterbalance to excessive risk.  (Perhaps he ought to have studied more Freud and less Friedman.)  The “oracle” has also grudgingly agreed that he was mistaken in his opposition to government regulation that might have prevented financial enterprises from taking gambles that would make bluffing against a full house look like a good bet.  But the “guru” cannot bring himself to accept any meaningful responsibility for his neglect and rationalizations of near fatal flaws in a system he so blindly perpetuated and the devastation it has brought to so many lives.  As he recently put it, “I was right seventy percent of the time,” which one observer correctly suggested was tantamount to the captain of the Titanic claiming to have been on course most of the way to the iceberg.  Greenspan continues to blame his sinking of the economy on a “perfect storm” — a so-called once-in-a-millennium confluence of events that no one could have predicted (excepting, of course, those who did, whom Greenspan arrogantly derided or blithely ignored).

For too long, Alan Greenspan stood on a pedestal we built for him.  Shame on us.  And shame on him for believing he belonged on it.

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