He also oversaw the economy for twenty years before one of the worst recessions in the world. He helped set the stage for multiple disasters with his policies, so I'd take his opinions with a grain of salt.
You don't credit an arsonist with "keeping a homeless person warm" when they set a homeless person on fire...
I don't think anyone really holds him responsible for the dotnet crash of 2000 as that was a market issue and irrational exuberance issue and not a monetary one.
And 2008 was similar. The Fed doesn't control or have any responsibility for lower lender standards or ARM mortgages.
Congress was responsible for the GSE's that bought any mortgages and wrote insurance on those mortgages, so you can't blame the FED for that.
Wallstreet are their regulators were responsible for the securitization of mortgages that went bad in 2008, not the FED.
At worst you can say they had the wrong monetary policy but that's an opinion and not something that can be said as a fact.
Can you flesh out how you feel Greenspan is responsible for 2008?
As for the Great Recession, taking the Fed Funds rate from 6.5% to 1.0% and holding it there for a year was the catalyst for driving everyone into the mortgage market looking for returns. And then did not regulate subprime lending or the shadow banking market:
"As the housing market boomed, subprime mortgage originations skyrocketed from 8.2% of all mortgages in 2003 to 23.5% in 2006. The Fed possessed the authority under the Home Ownership and Equity Protection Act (HOEPA) to crack down on predatory lending and loose underwriting standards but chose not to act aggressively."
"The Fed failed to properly monitor off-balance-sheet vehicles, investment bank leverage, and complex derivatives like mortgage-backed securities (MBS) and collateralized debt obligations (CDOs). Because these instruments developed outside traditional commercial banking oversight, a highly leveraged 'shadow banking' system grew completely unchecked under the Fed's watch."
So yeah, the Fed has its fingerprints all over the scene of the crime. Lots of blame to go around though..
Greenspan felt Greenspan was responsible for 2008.
https://www.nytimes.com/2008/10/24/business/economy/24panel....
It is hard to ask Greenspan to have super natural powers of foresight beyond just about everyone else.
From a person in his position the baseline is "more foresight than just about everyone else". That's why they get the big bucks.
If you build something grand on wooden legs and massive debt for the next guy to deal with, or drive into a failure mode even if that's not super obvious, it's not high praise.
It described the dotcom bubble, but I seem to recall people were applying it to the 2000s housing market too. Tldr it was not a totally uncommon opinion during either of these bubbles to say there was a bubble going on.
Congratulations on your new job. To help you out, I've enclosed three pieces of advice to follow when you encounter an intractable problem. Open them in order.
The next day in the meetings he blamed it on his predecessor and told of all the things that weren't done right... routine patching left undone, documentation in disarray. Upper management grumbled but agreed to give him the time to fix it.
Two years later there was another outage. This one went on for a day or two and management was once again getting angry about things and so he went to his desk and pulled out the second letter. "Blame it on the hardware."
With that, he went in pointing out that they were years behind on keeping the hardware itself up to date. Upper management grumbled again but agreed to a budget that allowed him to update the hardware.
For a while, everything was smooth and then it hit... another outage. He went to his desk and opened the third letter. "Prepare three envelopes."
means testing kills the usefulness of these kinds of stimuli. I completely disagree with your point here and the people buying Gucci/LV are a drop in the bucket compared to, say, Wal-Mart's yearly wage theft statistics.
There is no simple means of identifying who is in need and if people get the help who don't need it they can redistribute it if they are morally inclined or do hoarding or w/e; who cares?
I have homeowners insurance, but if my home burns down today I won’t have any reasonable assistance deposited this week. There’s a claim process and I need to have an emergency fund to get my immediate needs met.
Everyone should care. The national debt and eventually the nation will crumble based on these decisions to just print massive amounts of money with no real need.
I didn’t qualify for any stimulus after that one in 2001 so they are filtering it down and putting up some guardrails. They just need to give this some intent and pre thought. You can claim it’s too difficult when you didn’t even try to have a plan or come up with something that was actually going to good use to assist those in need.
Another way to think about it, if Covid was more severe than it was, we’d have wanted those payments to continue for twice or more longer to those in need. But if we were tapped out and had to stop them early, then those in need ultimately succumb to whatever and all the money was spent in vain.
I personally believe we shouldn’t socialize every blip. We are just perpetuating this “who cares” mentality and a welfare mentality. Why even have savings or an emergency fund, the government should step in at every turn. It’s a ridiculous stance in my view.
On the contrary, all public experience shows the opposite. The administrative costs of actually checking if only the right people are receiving a benefit very quickly start out weighing the cost of just paying everyone - especially if you don't want to make the process very onerous for the people who need it (and thus ensure that many who are entitled will not actually be able to receive this).
Don't let perfect be the enemy of good, nobody expects perfect checks but at least some sanity is much better than nothing. Also, it makes it much harder to shoot down by opponents rather than blanket money hose.
Now imagine you're homeless. You don't apply for assistance.
In a lot of cases, getting the money out there quickly matters a lot and taxing it back 1-3 years later is fine.
> if my home burns down today I won’t have any reasonable assistance deposited this week
It’s Monday. I’d wager that if I had that type of loss on a Monday, that I’d have $10K or so in my account from my insurance before Saturday.
We "printed" a lot of money to stop the economy from seizing - the opposite problem - but kept going past what everyone was calling a "soft landing":
https://fred.stlouisfed.org/series/M2SL
Inflation hit pretty bad as a result:
OTOH, there was a lot of pain iny the subsequent expansion leading up to the 2008 , but that was all the fault of fiscal (eepecially tax) policy of the Bush Administration and thei Congressional allies, not Fed monetary policy. While Greenspan clearly ideologically supported the people doing that, it wasn't him and the Fed causing the problems.
We deserve what we get if we don't act on the obvious pattern, at this point. We've spent half a century throwing the public under the bus just so that a few oligarchs don't have to pay out for their bad bets, and Greenspan was absolutely their man for a significant portion of that campaign in the class wars.
He set the stage for the financial crisis that started crumbling a year after he left the fed chair. It wasn't all his fault (politicians lost any spine and bankers any sense), but he was the conductor.
Shortly after he left a bank with over 150 years of history collapsed due to exactly that sort of mismanagement, triggering a crisis for the entire banking sector.