The Big Ideas of 2008

The Myth Maker

Alan Greenspan's thick weave of lies and deceit may mean the American economy never recovers.

There's a myth growing around Alan Greenspan. Just a year after he stepped down as Chairman of the Federal Reserve, he's now seen as some kind of financial wizard, economic genius and gifted virtuoso, who delighted in pure mathematics and jazz when he was young. Developing almost into folklore, it's said he learned some Promethean magic from the rational self-interest in Ayn Rand's Atlas Shrugged and then became the great macroeconomist who engineered the longest period of growth in American history.

For years, whenever he lowered the interest rates, the world gasped "ohhhh," and whenever he injected more liquidity into the markets, we all sighed "ahhhh." But it was all a bunch of bullshit. In reality, he was a man so blinded by the neoclassical money games that he couldn't see the forest through the trees. Despite a flurry of warnings over many decades, he never saw the ecological crisis coming – a changing climate, vanishing salmon runs, beetle infestations and fish disappearing from the seas. All these calamities were mere "externalities" to him – not a part of his world.

He could have been the man who shook up the world of economics. He could have started including ecological measurements into his fiscal calculations, put America's national accounts in order and redefined what economic progress means. But he didn't, and in that sense he is a grand failure, just another money man and bean counter who did not seize the moment. History will not be kind to him.

72 comments on the article “The Myth Maker”

Displaying 11 - 20 of 72

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Eric

Kalle, I grew up with my parents praising Greenspan for what he did, never being fully aware of what it is that made him so great. But now with my age, having read works like Joel Hawken's Ecology of Commerce, Daniel Quinn's publishings, and Culture Jam, I understand the picture of the true cost of Economics and want to see a change in the way our society values the measure of progress.

Drew

This article should go into much more detail about his actual economics then dismiss him for not being an environmentalist that obviously he isn't. Why, this article is about what it is about, read and digest it as it is and then critique it for what it is not what it should be.

Annas

This man Greenspan should read the Holy Qur'an:

Surah 30. AR RUUM 41
The Romans, The Byzantines

Mischief has appeared on land and sea because of the meed that the hands of men have earned. That Allah may give them a taste of some of their deeds: in order that they may turn back from Evil.

Surah 17. AL ISRAA' 26
Isra', The Night Journey, Children Of Israel

And render to the kindred their due rights, as also to those in want, and to the wayfarer: but squander not your wealth in the manner of a spendthrift.

Surah 89. AL FAJR 20
The Dawn, Daybreak

And ye love wealth with inordinate love!

Surah 25. AL FURQAAN 67
The Criterion, The Standard

Those who, when they spend, are not extravagant and not niggardly, but hold a just balance between those extremes;

Surah 15. AL HIJR 3
Alhijr, Stoneland, Rock City

Leave them alone, to enjoy the good things of this life and to please themselves: let false Hope amuse them: soon will knowledge undeceive them.

Sam S.

Are you kidding me?

In normal dialogue, things will go along and you can pretty much say what you want unless you call the person a liar. Then it all breaks down. Here, you've naively thrown around pithy epithets and called the man's 19 years of public service a sham.

Also, just on a formatting note, you would expect the cover page feature would be more than a three-paragraph diagnosis of the state of American fiscal policy.

Ralph Mondi

I think it might be a little unfair to hang out Mr Greenspan as someone who could have changed the course of American and British capitalism. My view is that the reason he stayed in his job for the amount of time he did was purely due to the fact that he performed 'his duties' as prescribed by the big bankers of this world. Should he have gone against their ideas he would literally have been very short lived, indeed. There are many examples of what happens to men and women who dare to follow their own paths. But because men it seems cannot help at helping himself to riches and power at any price except his own life whenever such opportunity arises, I believe we have to look at the social structure as a whole and make changes in the constitutions of the different countries in an attempt to prevent big money and administrative power to go together. However, a glance at the middle class minded politicians and CEOs of our barbaric age does not offer any hopes that this would ever be a option for the decision-makers. It seems only an imminent huge natural disaster could cause a radical change in our thinking and behaviour.

Doctor Pii

This ARTICLE should have been a comment.

We could delve into the fact the Federal Reserve was created by rich powerful bankers to basically own the world, totally held by private interests, not our own government, but lets not. You wouldn't want to hear it, too afraid of what that might mean.

Julie

Uhh... is there more to this article? This is the first time I've been to this site, and based on this unsupported and subjective dribble, I'm questioning whether I should read anything here any further... maybe the rest of the article is in the mag?

pebede

I agree with most of the above thoughts. If you're writing such an article about a man who served his country as a public officer for many years, you need to put down something more than a 'saying'. You need to put evidince supporting your article.

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