It's all Greenspan's fault. - Inspired by Congressional testimony

It's not ALL Greenspan's fault, but a lot of it is. He conceded that he was wrong in assuming that free-market forces would prevent the current crisis. (http://www.latimes.com/news/printedition/front/la-fi-greenspan24-2008oct...) Now he's saying that there's no way we can avoid a significant rise in unemployment. But deregulation of the market got started during Greenspan's tenure, and he needs to own up to that. We should never rely on the idea that "the market knows best" again.

Congress is just looking for a scapegoat so they don't have to accept the blame themselves. They were the ones pushing the "everyone should own a home" agenda. They never stopped to think that not everyone can afford a home.

No no no.. I think he did what he thought was right. Its the banks that took advantage of the situations at the time that need to be held accountable.

I agree that Congress is trying to shift blame away from themsleves. Waxman won't even call FredieMac or FannieMay to testify until after the election when it won't matter anymore.

There's a lot of blame to go around. Think ecosystem... and the consumers trashed the park.

Where does the buck stop?

In many places, starting with the Reagan administration right through to George W. Underlying all the mistakes is a neo-conservative world view that believes in free market capitalism and no place for the government or for taxes or to the common good. A great example is McCain's strong objection to the distribution of wealth, i.e privilege and power - the very heart of American democracy and the promise of a fair, well governed economy.

Greenspan was characterized as a sober and insightful guide for the economy for so many years and he was singularly effective under certain Presidents and under certain economic contexts. The keys were handed over to him for perhaps too long a period. When his basic fiscal and social philosophy in action was matched by incompetence in the White House and greed on Wall Street the cataclysm began to unfold.

Jane Jacobs warned us about mixing business with governance. There is a reason why many successful civilizations and cultures insisted on strict separation of business under governance. When you get businessmen in the White House this can produce the worst kind of moral and social dysfunction.

Capitalism is a wonderful economic engine but without good governance it is a powerful and damaging engine gone amok. Hopefully the fundamentalists of the neo-conservative stripe have seen their day.

--
Mel Blitzer

I think we would all like to point fingers and place the blame on anything but the system. Truth is, the system is at fault and there is not a way to fix it with out allowing the pendulum to swing. There are good and bad economic points in the history of this planet, but they have never before been so intertwined. We push for globalism and then we don't realize how global our prinicpals really are until they break down. There is a lot of good because of the system as it has evolved, but the economy should have never been removed from a gold standard. Inflation is insane and you never know how much liquid cash you have available as a country. To see the deficit rise to the trillions is something once though impossible, but now it is continuing to rise higher than that. An extreme reorganization is in order, but convincing everyone to do it will be the hardest part.

Certainly enough blame for many to share. For me the bottom line is that the free market has proven once again that it can not be trusted to regulate itself. The whole free market concept begins to fail when demand is artificially inflated by easy credit.

Oh yes, greenspan told all the mortgage companies they should make junk loans to people who could NEVER afford the repayment, and also told he major money holders to package these loans in with all the "good" ones.... and do away with the wole idea of B/C grades of paper (where you could get a loan, with a big down payment and a high risk representative interest rate). Yeah, one man decided that he was going to screw with the economies of the free world as a practical joke. and in no way were the greedy lenders, or the politicians who thought poor people who can't afford loans should have them anyways are responsible for any of this! What a display of stupidity. Ask any 6 year old if they think it's a good idea to give money to people who will never give it back would be a good way to run a business. The market isn't the problem, it's in the assumption that the market will look after and police itself. Blame the businesses who did stupid things! Blame the boards of directors, CEO's CFO's and the fat cat majority share holders! Blame the big mutual fund houses that invest all your 401K monies in these companies without the due dilligence they claim to use! Blame the cosumer for doing something so stupid as to buy something they knew they would never be able to afford! GROW UP and take responsibility for your own actions or lack of actions. Would you blame the Greenspan for your bank account not being ballanced and you bounced another check, or would you suck it up, learn the lesson, and fix the problem? BTW, Greenspan didn't deregulate the market, that's like blaming Bush for your speeding ticket. Greenspan didn't make the laws, he made the rates!

one more thing, America wasn't founded on equal income for all, it was the idea of life, liberty and the peruit of happiness. Communism and socialism are the great equalizers of income, everyone gets nothing! Didn't you notice how well that worked out for the Soviets?

Partially - yes. But not ALL.

Well really it's Milton Friedman's fault. Err umm well ultimately it's just the fault of society which allowed itself to believe that unbridled capitalism isn't the same thing as 2 year old run wild and unsupervised through your home. Sure he's happy as a pig in 5h1t for a few minutes until he sticks his finger in a light socket.

Sadly the problem is even deeper. The problem is that we have made economics the single most important part of our lives.

The blame rests with congress. They, bowing to community action organizations like ACORN, created legislation that encouraged sub-prime lending.
The investment banks ran with this and built a house of cards. When regulators testified before congress about the problems and asked for authority to intervene, they were vilified, especially by the congressional black caucus with support from the Democrats and got no real fight from the cowardly Republicans.

Trevor,Greenspan himself admitted that his deregulation dogma was partly to blame:

Greenspan acknowledged he had made a mistake in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. Greenspan called that "a flaw in the model ... that defines how the world works."

Zealotry doesn't help matters. I suggest you actually read the article. Take a couple of Xanax first.