{"id":15426,"date":"2017-01-26T10:35:54","date_gmt":"2017-01-26T15:35:54","guid":{"rendered":"http:\/\/www.megalextoria.com\/wordpress\/?p=15426"},"modified":"2021-06-25T08:52:37","modified_gmt":"2021-06-25T12:52:37","slug":"greenspan-the-undertaker-and-his-countless-victims","status":"publish","type":"post","link":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/2017\/01\/26\/greenspan-the-undertaker-and-his-countless-victims\/","title":{"rendered":"Greenspan the Undertaker and His Countless Victims"},"content":{"rendered":"

\"\"<\/a><\/h2>\n

Greenspan the Undertaker and His Countless Victims<\/h2>\n

Emi and Glen Yamasaki were a smiling couple that waved at their neighbors in the Sun City Anthem neighborhood of Henderson. Other retirees who lived near them couldn\u2019t believe the Yamasakis committed suicide<\/span><\/a> by jumping from the top story of the Silverton Casino\u2019s parking garage.<\/span><\/p>\n

What neighbors didn\u2019t know is the couple\u2019s golden years were not so shiny. Having bought their home at the top of the market in 2005, they were likely underwater and were facing foreclosure and other money troubles. W.C. Varones\u2019 \u201c<\/span>Greenspan\u2019s Body Count<\/span><\/a>\u201d counts Mr. and Mrs. Yamasaki as victims 257 and 258.<\/span><\/p>\n

\u201cA decade after the peak of his diabolical, deliberately created housing bubble, the 21st century’s most prolific serial killer is still killing,\u201d writes Varones on his blog. \u201cLess than a month after his most recent murder, Alan Greenspan has killed a married couple in Las Vegas.\u201d<\/span><\/p>\n

The Man Who Knew<\/strong><\/p>\n

Sebastian Mallaby describes Varones as a \u201cvituperative blogger\u201d in his book <\/span>The Man Who Knew: The Life and Times of Alan Greenspan<\/span><\/em>. However, the blog, which likely <\/span>undercounts<\/span><\/a> \u201cmortgage-related suicides,\u201d provides prescience to Ayn Rand\u2019s nickname for Greenspan, \u201cThe Undertaker\u201d \u2013 joining other nicknames such as \u201cthe Maestro\u201d and \u201cthe Greatest Central Banker Ever.\u201d<\/span><\/p>\n

Of Mallaby\u2019s very readable account of his life, the Maestro himself <\/span>called<\/span><\/a> the book \u201cnot always positive, but accurate.\u201d Mallaby believes his subject knew all about the bubbles the Fed was creating but didn\u2019t act. But, of course, the market did act, harshly. It\u2019s Mallaby\u2019s view that Greenspan could have pricked these asset bubbles and somehow let the air out slowly, making it painless for everyone.<\/span><\/p>\n

So why didn\u2019t he? The \u201cgreatest central banker in history\u201d insisted in hindsight that bubbles were impossible to detect until it was too late.<\/span><\/p>\n

No doubt Murray Rothbard is somewhere laughing. Mallaby mentions Greenspan\u2019s devotion to Ayn Rand, laissez-faire capitalism, and the gold standard often. But, as Rothbard <\/span>wrote<\/span><\/a>, \u201cFor Greenspan, laissez-faire is not a lodestar, a standard, and a guide by which to set one’s course; instead, it is simply a curiosity kept in the closet, totally divorced from his concrete policy conclusions.\u201d<\/span><\/p>\n

The shy undertaker was not a swashbuckling Randian hero or libertarian firebrand, but a passive-aggressive political manipulator. However, those inside the Fed, like Alan Blinder, gushed as Greenspan was retiring, \u201cFinancial markets now view Chairman Greenspan\u2019s infallibility more or less as the Chinese once viewed Chairman Mao\u2019s\u201d \u2013 an interesting and rather backhanded compliment from an economist who occasionally butted heads with his boss.<\/span><\/p>\n

In either case, history would say otherwise. Other than New York, Greenspan never saw a bailout he didn\u2019t support or a bubble he couldn\u2019t create. After all, it kept both Wall Street and the political class happy \u2013 both here and abroad. The man who grew up without a father and with an overbearing, doting mother wanted to gain powerful people’s\u2019 approval. He hated confrontation.<\/span><\/p>\n

If Greenspan was familiar with Austrian Business Cycle Theory, and he should have been, he\u2019d have known crashes and recessions are needed to correct the malinvestments created by central bank monetary interference. To paper over crashes and bail out losers is to destroy precious capital by keeping it in the hands of those who waste it.<\/span><\/p>\n

However, Greenspan was a Keynesian forecaster who, as Rothbard <\/span>explains<\/span><\/a>, had no interest in Austrian economics or economic theory at all. Murray, who had met Greenspan, admitted he didn\u2019t understand how Greenspan rose to power. \u201cHe\u2019s the least charismatic person I\u2019ve ever seen,\u201d Rothbard said. \u201cHe has the persuasiveness of a dead mackerel.\u201d<\/span><\/p>\n

Most libertarians are familiar with Greenspan\u2019s 1966 article “Gold and Economic Freedom<\/a>,” an attack on fiat money and central banking. Years later, Congressman Ron Paul asked the Fed Chair to sign an original copy. As Greenspan signed, Paul asked him if he still believed what he wrote in that essay some 40 years before. \u201cGreenspan \u2013 enigmatic as ever \u2013 responded that he \u2018wouldn’t change a single word,\u2019” <\/span>writes<\/span><\/a> Michael Kosares.<\/span><\/p>\n

But to read Mallaby, Greenspan was not so much an enigma as much as he was duplicitous. For instance, President Reagan was very interested in returning to a gold standard and mentioned it often. A Gold Commission was even formed. Meanwhile, Greenspan \u201cfeigned empathy with his adversaries and played skillfully for time, morphing from an ardent advocate of gold into its most devious opponent,\u201d writes Mallaby.<\/span><\/p>\n

The Two Exclusions<\/strong><\/p>\n

In the nearly 700 pages of text, two things are strangely not mentioned: the Enron Prize for Distinguished Public Service, which Greenspan accepted just a few days after Enron filed paperwork admitting to having fabricated its financial statements for five years, and his dissertation.<\/span><\/p>\n

Greenspan\u2019s mentor was Arthur Burns, who happened to chair Murray Rothbard\u2019s dissertation at Columbia. The fruit of Rothbard\u2019s work was the seminal <\/span>Panic of 1819<\/span><\/em>. Meanwhile, \u201cAlan,\u201d Princeton economist Burton Malkiel gushed, \u201cis one of the smartest people I\u2019ve ever known in my life,\u201d but didn\u2019t manage to file his dissertation until 1977 at New York University, where boyhood friend Bob Kavesh urged him to finish his Ph.D.<\/span><\/p>\n

 <\/p>\n

Jim McTague, a reporter for <\/span>Barron’s<\/span><\/em>,<\/span> secured <\/span>a copy<\/span><\/a> in 2008. As excited as McTague was to get his hands on it, there wasn\u2019t much to it. It was merely a collection of articles totaling 180 pages. \u201cTwo chapters that had been published as articles in the American Statistical Association’s annual proceedings contain several pages of algebraic equations that, frankly, made our head ache,\u201d wrote McTague.<\/span><\/p>\n

Paul Wachtel, an NYU economics professor who was on Greenspan’s dissertation committee, defends Greenspan\u2019s work, claiming, \u201cthe chapter written by Greenspan in 1959 on investment risk and stock prices anticipated by 10 years the Q ratio developed in 1969 by the late James Tobin,\u201d who would become a Nobel laureate.<\/span><\/p>\n

Mallaby sprinkles his narrative with anecdotes that make <\/span>The Man Who Knew<\/span><\/em> very fun to read for those of us who lived through the roller coaster Greenspan economy and appreciate political skullduggery \u00e1 la <\/span>House of Cards<\/span><\/em>. Although, with the way the author describes Alan and wife (finally) Andrea Mitchell, you\u2019d think they were as glamorous as Brad and Angelina.<\/span><\/p>\n

And who knew there was a \u201cManley Put\u201d supporting stock market prices before there was the famous \u201cGreenspan Put\u201d? Perhaps ironically, the Manuel (\u201cManley\u201d) H. Johnson <\/span>Center For Political Economy<\/span><\/a> at Troy University has one of the most free-market oriented economics programs in the country.<\/span><\/p>\n

\"\"<\/span><\/p>\n

I had the occasion to meet Manley before a Troy football game and we traded stories about Rothbard. Johnson was a 38-year old vice chair at the Fed when Greenspan took over. He is described by Mallaby to have \u201cshocking youthfulness\u201d and \u201cthe courtly charm of a Southerner.\u201d I can verify that he still does.<\/span><\/p>\n

The idea that the Federal Reserve is somehow independent of the executive branch is quashed by the author. Greenspan, <\/span>like his mentor Burns<\/span><\/a>, was eager to do the President\u2019s bidding. George W. Bush\u2019s first meeting as President was with the Fed Chair. Greenspan made a trip to Arkansas to meet with President-elect Clinton.<\/span><\/p>\n

The Man Who Bailed<\/strong><\/p>\n

Ultimately, Greenspan\u2019s gift was timing. Janet Yellen, then the president of the San Francisco Fed, is quoted by Mallaby as saying on Greenspan\u2019s last day in January 2006 that \u201cit\u2019s fitting for Chairman Greenspan to leave office with the economy in such solid shape.\u201d<\/span><\/p>\n

As it turned out, he left just in time: the bubble was a year away from popping and Ben Bernanke would step in to engineer the bailout of all bailouts, prolonging the fallout to this day. Meanwhile, Greenspan earned $250,000 by speaking to a \u201chandful of Lehman\u2019s hedge-fund clients,\u201d just a week after leaving his Fed post. (Lehman would file for bankruptcy a year and a half later.) Then work began on his memoir, aptly entitled <\/span>The Age of Turbulence<\/span><\/em>, for which Greenspan was paid $8 million.<\/span><\/p>\n

 <\/p>\n

The man who knew is actually the man who bailed out: countries, companies, and finally himself. Ayn Rand always had her doubts about Greenspan, and would frequently ask her associates, “Do you think Alan might basically be a social climber?”<\/span><\/p>\n

To this day, Greenspan is still in high demand as a keynote speaker. He is represented by the <\/span>Washington Speakers Bureau<\/span><\/a> which claims it is \u201cConnecting You to the World\u2019s Greatest Minds.\u201d He is addressing the Private Equity International CFOs and COOs Forum this month.<\/span><\/p>\n

Meanwhile, facing a retirement drowning in debt, Emi and Glen Yamasaki were 63 when they took their lives. The Maestro, Undertaker, or Greatest Central Banker Ever will reach the ripe old age of 91 in March, long outliving the victims of the bubble economy he created, and sadly reaping riches from his status and mythology.<\/span><\/p>\n


\nDouglas French
\n<\/a><\/h5>\n

Douglas French is an Associated Scholar at the Johnson Center at Troy University and adjunct professor at Georgia Military College. He is the author of three books: Early Speculative Bubbles and Increases in the Supply of Money<\/em><\/a>, Walk Away<\/em><\/a>, and The Failure of Common Knowledge<\/em><\/a>.<\/p>\n

This article was originally published on FEE.org. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Greenspan the Undertaker and His Countless Victims Emi and Glen Yamasaki were a smiling couple that waved at their neighbors in the Sun City Anthem neighborhood of Henderson. Other retirees who lived near them couldn\u2019t believe the Yamasakis committed suicide by jumping from the top story of the Silverton Casino\u2019s parking garage. What neighbors didn\u2019t know is the couple\u2019s golden years were not so shiny. Having bought their home at the top of the market in 2005, they were likely underwater and were facing foreclosure and other money troubles. W.C. Varones\u2019 \u201cGreenspan\u2019s Body Count\u201d counts Mr. and Mrs. Yamasaki as victims 257 and 258. \u201cA decade after the peak of his diabolical, deliberately created housing bubble, the 21st century’s most prolific serial killer is still killing,\u201d writes Varones on his blog. \u201cLess than a month after his most recent murder, Alan Greenspan has killed a married couple in Las Vegas.\u201d The Man Who Knew Sebastian Mallaby describes Varones as a \u201cvituperative blogger\u201d in his book The Man Who Knew: The Life and Times of Alan Greenspan. However, the blog, which likely undercounts \u201cmortgage-related suicides,\u201d provides prescience to Ayn Rand\u2019s nickname for Greenspan, \u201cThe Undertaker\u201d \u2013 joining other nicknames such as […]<\/p>\n","protected":false},"author":1,"featured_media":15427,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[249,409,648,692,810],"class_list":["post-15426","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-politics","tag-audit-the-fed","tag-central-banking","tag-end-the-fed","tag-federal-reserve","tag-greenspan"],"_links":{"self":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/15426","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/comments?post=15426"}],"version-history":[{"count":0,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/15426\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/media\/15427"}],"wp:attachment":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/media?parent=15426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/categories?post=15426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/tags?post=15426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}