According to the Wall Street Journal in his new biography ex Fed Chairman Greenspan, a follower of Ayn Rand, bitch slaps the Bush regime. Too bad he didn't say this when he was still Fed Chairman.
Mr. Greenspan, who calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose."
Mr. Greenspan discovered that in the Bush White House, the "political operation was far more dominant" than in Mr. Ford's. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he writes.
And interestingly he takes no blame for the current housing crisis sub-prime melt down that he created when he was fed chairman.
Many economists say the Fed, by cutting short-term interest rates to 1% in mid-2003 and keeping them there for a year, helped foster a housing bubble that is now bursting.
Instead he blames communism, or at least the melt down of the Soviet Union.
So it was not the Fed that brought down interest rates, or created the global capitalist boom rather it was the devolution of the Soviet Union and the massive amount of unemployed workers available world wide to drive down wages.
He attributes the housing boom to the end of communism, which he says unleashed hundreds of millions of workers on global markets, putting downward pressure on wages and prices, and thus on long-term interest rates.
The wave of migrant workers now flooding Europe, like those flooding into America, created the housing boom, by being a cheap source of construction labour and as consumers of the housing.
Mr. Greenspan returns repeatedly to the far-reaching importance of communism's collapse. He says it discredited central planning throughout the world and inspired China and later India to throw off socialist policies.
As well as cheap labour in the new fordist economies of China and India, especially the formers transformation from state capitalism to monopoly capitalism directly impacted on the American and global markets more than anything he and his monetarist pals did.
Confession is good for the soul. Ironically that confession fits classic Marxism more than it does the wacky ideology of his idol Ayn Rand.
And here is another irony that the joy expressed by the monetarists over the transformation of state capitalist economies to fordist monopoly capitalism will result in more inflation, their bugaboo.
In coming years, as the globalization process winds down, he predicts inflation will become harder to contain. Recent increases in the price of imports from China and a rise in long-term interest rates suggest "the turn may be upon us sooner rather than later."
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