Saturday, September 15, 2007

Greenspan & Powell: BFF

Perhaps the two greatest enablers of the macro-misteps of the Bush Era are former Secretary of State Colin Powell and former Fed chief Alan Greenspan. Powell enabled the President and the country into a disastrous war; Greenspan did the same with the subprime mess. And now they both want to totally absolve themselves of any responsibility and blame it all on Dubya.


From The NYTimes:

WASHINGTON, Sept. 14 — Alan Greenspan, who was chairman of the Federal Reserve for nearly two decades, in a long-awaited memoir, is harshly critical of President Bush, Vice President Dick Cheney and the Republican-controlled Congress, as abandoning their party’s principles on spending and deficits.

In the 500-page book, “The Age of Turbulence: Adventures in a New World,” Mr. Greenspan describes the Bush administration as so captive to its own political operation that it paid little attention to fiscal discipline, and he described Mr. Bush’s first two Treasury secretaries, Paul H. O’Neill and John W. Snow, as essentially powerless.

Mr. Bush, he writes, was never willing to contain spending or veto bills that drove the country into deeper and deeper deficits, as Congress abandoned rules that required that the cost of tax cuts be offset by savings elsewhere. “The Republicans in Congress lost their way,” writes Mr. Greenspan, a self-described “libertarian Republican.”

That's some libertarianism he practiced, artificially and unwisely keeping the discount rate so low so long as to enable Bush's re-election while not looking after the long-term health of the American economy. Milton Friedman spins in his grave wondering where Paul Volcker is.