Comments on: The Demise of the Greenspan God http://www.businesspundit.com/the-demise-of-the-greenspan-god/ Entrepreneurship, Startup Companies and Business Philosophy Fri, 20 Nov 2009 20:31:15 -0600 http://wordpress.org/?v=2.8.5 hourly 1 By: FED is the enemy http://www.businesspundit.com/the-demise-of-the-greenspan-god/comment-page-1/#comment-11466 FED is the enemy Fri, 19 Dec 2008 02:13:31 +0000 http://www.businesspundit.com/?p=5388#comment-11466 The article and the comments seem to completely bypass the concept that Greenspan wasn't the problem, he was just a face of the FED for a while. The FED is the problem along with government backed mortgages and loans of any kind. When the Gov. and the FED back a loan the only collateral they can offer is the revenue from the taxpayer so they essential guarantee the loan and indemnify the lender from failure. This leads to lenders feeling no fear of loan failure and focusing completely on the origination and not the value of the loan. When the lending institutions do fail they should be allowed to fail forcing sanity into the lending process. There should never have been a government loan guarantee program in the first place - Fannie and Freddie are the worst forms of socialism. The free market is not to blame for the current situation - it is the government programs that attempted to manipulate the free market and the FED which is the direct government manipulation of the free market that are to blame for the failure of the US financial world today. The article and the comments seem to completely bypass the concept that Greenspan wasn’t the problem, he was just a face of the FED for a while. The FED is the problem along with government backed mortgages and loans of any kind.

When the Gov. and the FED back a loan the only collateral they can offer is the revenue from the taxpayer so they essential guarantee the loan and indemnify the lender from failure. This leads to lenders feeling no fear of loan failure and focusing completely on the origination and not the value of the loan. When the lending institutions do fail they should be allowed to fail forcing sanity into the lending process. There should never have been a government loan guarantee program in the first place – Fannie and Freddie are the worst forms of socialism.

The free market is not to blame for the current situation – it is the government programs that attempted to manipulate the free market and the FED which is the direct government manipulation of the free market that are to blame for the failure of the US financial world today.

]]> By: Alan McRae http://www.businesspundit.com/the-demise-of-the-greenspan-god/comment-page-1/#comment-8895 Alan McRae Thu, 18 Sep 2008 15:14:41 +0000 http://www.businesspundit.com/?p=5388#comment-8895 We seem to have forgotten a host of lessons learned during the robber baron era in the early 20th century: the dangers of de-regulated big business, the importance of checks & balances in the exercise of power, the inevitable abuses of megacorporate monopoly power, the recurring sacrifices of the public good for the private good of politically connected special interests, "free market" collusion to circumvent third party oversight, and on & on. In the real estate market, the oversight of real estate appraisers was circumvented by the free market mechanism of allowing mortage brokers & real estate brokers to select those appraisers that would deliver the valuation numbers that they needed to put their deals together - resulting in a relentless upward spiral of housing values. When sound credit practices got in the way of continued sales, the real estate industry played "pass the mortgage" because no one was watching & regulating, and US dollars were piling up off-shore where where suckers could be lured into buying high risk mortages as part of inscrutable CDO financial instruments. George Carlin once said "fortunately for comedians, people learn nothing from history." Unfortunately, we are all paying for the folly of unwise big business deregulation and growing monopolization by ever larger megamergers rubber stamped by bought & paid for government regulators. But even worse, the greatest national economy in world history was shepherded from the largest creditor nation in the world to the largest debtor nation in barely two generations through the greed & collusion of those entrusted with our economic future. Shame on you all! We seem to have forgotten a host of lessons learned during the robber baron era in the early 20th century: the dangers of de-regulated big business, the importance of checks & balances in the exercise of power, the inevitable abuses of megacorporate monopoly power, the recurring sacrifices of the public good for the private good of politically connected special interests, “free market” collusion to circumvent third party oversight, and on & on. In the real estate market, the oversight of real estate appraisers was circumvented by the free market mechanism of allowing mortage brokers & real estate brokers to select those appraisers that would deliver the valuation numbers that they needed to put their deals together – resulting in a relentless upward spiral of housing values. When sound credit practices got in the way of continued sales, the real estate industry played “pass the mortgage” because no one was watching & regulating, and US dollars were piling up off-shore where where suckers could be lured into buying high risk mortages as part of inscrutable CDO financial instruments. George Carlin once said “fortunately for comedians, people learn nothing from history.” Unfortunately, we are all paying for the folly of unwise big business deregulation and growing monopolization by ever larger megamergers rubber stamped by bought & paid for government regulators. But even worse, the greatest national economy in world history was shepherded from the largest creditor nation in the world to the largest debtor nation in barely two generations through the greed & collusion of those entrusted with our economic future. Shame on you all!

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