Alan Greenspan, I Think You’re Great!
It needs to be said, so I will say it: I like Alan Greenspan. He’s both a funny old man, and an avid bit coin miner (or so I presume)
Before I go any further. Just look at him! Is that the face of Wall Street greed and excess?
It’s become en vogue to hate on Greenspan because of that little thing we like to refer to as “the housing bubble”. The buck and the blame for which always seems to land on Greenspan’s lap.
Yes, interest rates were too low. But come on now, imagine you are Greenspan and it’s 2002. The dot-com bubble had just Hezbollah-ed in our faces, Al Qeda had attacked Tribeca, what’s a Federal Reserve governor to do? Lower rates!
And while many of you say it’s not his lowering of the rates in 2001-2002 that were to blame, but rather his maintenance of these low rates up until 2005.
These Greenspan haters will say that the housing bubble was all part of Greenspan’s Joker-esque plan. He wanted housing prices to grow ridiculously out of line just so he could line his pockets with all the Big Derivative money he’d get in the process.
It’s almost as if Greenspan saw the future housing bubble, and the trillion dollar calamity that came after it, and said ‘you know what, fuck it, im still gonna plunge the world into the next great depression so I can line my pockets for the 7 years of life I have left’.
In the words of the short little chef in Ratatouille,“I find that highly suspect!”
Did Greenspan keep rates too low? Perhaps. Did they lead to the housing bubble? Perhaps. Does that make him a monster? No!
You know what,if I were the chairman of the Federal Reserve, there aint no way in hell I am raising interest rates in 2003, 2004, or 2005. You know why?
Because I’m not a dick.
Every basis point increase in the fed prime rate manifests itself on the streets of the US in the form of layoffs, closings, and foreclosures. Raising rates in 2004 would have put in jeopardy an economic recovery which had not happened outside of the housing market. It’s not like we were all burning $10 bills in the good ole days of ‘04 and ‘05. Lets be real, we haven’t had a good economic party since the Cisco IPO.
Greenspan is not a dick.
He’s just an old man, who upon going into retirement gave us a few more drops out of the money spigot. Like an extended last call called by a bartender, or the bumper car operator at Six Flags who lets the ride go for 2 minutes longer than it should. He let the rates stay low for no other reason that it helped us as a country get better economically. Even if that meant an asset bubble formed in areas of the economy.
No, he is not evil. He is not to blame. He’s just a guy, perched upon one of the loneliest seats in the world, who decided that he was done playing God to millions of people.
However, I will have to admit. He does bear an uncanny resemblance to a monkey.