Dear Mr. Baker, truth means nothing to those who own the media. Heck, they intend to put Ronald Reagan's ugly mug at Mt. Rushmore, and even an intellectual baboon like Bush-the-Lesser receives an honorable book tour! Hate-mongers get unlimited air time, while progressive thinkers are kept away from just about every media microphone.

Greenspan delivered the goods to his elite sponsors hence his hour of homage. It's as simple as that! These grotesque individuals have endeavored to divide up the world like gods from Olympus; and they're too pampered by privilege to hear (or respond to) the cries of the millions whose lives have fallen into despair.

Of all the sins of recent decades, and there have been many, the two that stand out most (in my vision) are:

1. The uptick in militarism, and what it's stolen in the way of life, liberty, and living ecosystems from countless millions.

And...

2. The media giveaway: Allowing the pre-existing broadcast companies to gain use of the digital bandwidth without demanding that a portion of air time be devoted to genuine public service constitutes a heist of monumental proportions. The next step down the slippery slope of deregulation has enabled just a few powerful corporations to control content and thereby manufacture the public's consent.

No people can be free when they are kept in the dark about the state of their nation, and/or what its "leaders" are conducting in their names. Obstruction, obscurity, and expensive deceits pass for discourse in this land of the hardly free or brave. America is the seat of global deception, and its people, enslaved by what they neither know nor understand. Increasingly.

I'm going to be a little unfair to Dean Baker, one of our very few honest economists, and point out the full implications of his own case:

"The housing bubble was really hard to miss for anyone who can read a chart and knows arithmetic." Point taken. But Greenspan was not the only economist to "overlook" (meaning deny) the bubble: essentially ALL of them did. The exceptions, including Baker, can be counted on one hand.

This means that the entire profession has been discredited. Economists, as a category, are either incompetent or dishonest, or, of course, both. They should all be fired and replaced, using the competent/honest very few as seed stock. Ready to volunteer for the job of remaking your profession, Mr. Baker? I sure hope so.

Alan Greedspan.

Incompetent is now the repacement word for criminal.

With all due respects to Mr. Baker, unless he's intending this to be parody, I have to completely disagree with the entire premise of the article. As far as I can tell he has 2 main points. The first that Alan Greenspan either failed to see the housing bubble or that if he did see it, that he could contain it. The second, that after the housing market collapse which has brought the working people so much pain that the Brookings Institute shouldn't have invited Alan Greenspan to give the keynote address because, well they're among the most elite of our intellectual institutions.

Everything we've learned point that neither of these two premises are true. As I and many, many others here on CD have pointed out, a child could have seen this housing collapse a mile away. When housing prices became 15 to 20 times the annual salary of a typical retail or service worker (the majority of the population now) how anyone saw this as doable is beyond the pale.

No, these people saw this a mile away. They just didn't have any plan because to put the brakes on the housing boom - and the financial industry that fueled it - would have made the great collapse happen right at the beginning of George Bush Jr's first term in office and would have overshadowed everything else these bunch of criminals were trying to get done. That and the sad truth is that these are the same people who have personally profited so handsomely off of the dire misfortune of the working class - including the housing collapse. Remember the justification for TARP and all the other b.s. that Congress, The White House, and the Fed have thrown at these criminals.

The real story with Alan Greenspan and all the rest of these people is that they have spent the past 30 years or more purposely impoverishing the working class in order for the idle investor class to become even more filthy rich.

By fascist standards, Greenspan was a great conservative success. Under his guidance, government made the rich richer and everyone else poorer

The idea that what happened is somehow due to "incompetence" or "stupidity" is hilarious.

The only surprising thing in all of this is that someone like Dean Baker (who is otherwise very intelligent) still buys this poppycock.

It's like the claims that what happened in Iraq was due to "incompetence".

The fact is, Greenspan was WILDLY successful at what he and others had set out to do: dismantle the federal regulatory structure and redistribute wealth upward to those who "deserve" it (The Ayn Rand "movers and shakers").

Greenspan is still lionized because these are all his pals he is talking to. They are the ones who control the purse strings in this country and hence the ones who still call the shots.

No surprise that they have not been called to task because they've got their man in the White House (Obama) wrapped around their little finger.

People need to recognize the Asian Miracle bailout and the Mexican bailout and the Dot-Com bubble and the Enron scandal and the S&L bailout to contextualize the Housing bubble or more generally the Real Estate bubble. All were historical precedents that should have created red flags even as deregulation of financial instruments continued not only unabated, but relentlessly. (One could make a case that Enron destroyed the economy of California...)

One can make a case that these disasters were as much the product of the Digital Revolution as of any true human volition. One can construct a parallel time-line, between the computer revolution and the ability to actually create extremely complex financial instruments such as credit default swaps. Such entities could not exist if they had to rely on the USPS or the teletype.

It would seem that we have a failure here of species. If we can create Complexity, we will, esp. if it is to our advantage to do so. Bloomberg became a billionaire by recognizing this. His early computerization of trading on the Internet was itself a small revolution.

The issue of regulation of financial transactions versus deregulation in the past two decades or so has a specific history, the details of which will take more decades to unravel. Progressives, especially, have a bone to pick here. One might ask, for example, how it came to pass that you could buy a house using a credit card?

During the Dot-Com bubble and later, my boss and I got into discussions like, "if only I had trusted my instinct that Apple and Steve Jobs would rebound from their slump, I would have made a fortune." Twice!

The question is, Who are the Economic Realists? In this context, note that Bernanke and Paulson under Bush the Lessor failed to intervene in what everybody knew was a Real Estate bubble, until it collapsed, and then they injected hundreds of billions to salvage the banks instead of the borrowers.

This process not only stole trillions from the American Middle Class, but it turned out to be global, because other countries with their interlocking banking systems had also created their own Real Estate bubbles, Spain being a good example.

No conspiracy is necessary here. It can easily become a matter of mere shared thinking, as each investment house competes to find another profitable trick. "Junk-bond collateralized semi-default short-sold default swaps." Got that?!

Meanwhile, all these skilled Real Estate contractors are out of work, many now on Food Stamps, while most of them thought they were riding high on into the future, and now they are broke.

The anger is palpable. The problem is that it is not properly directed. What does it mean to be an American in this context? Is Modern Economics a Decline to the Least Common Denominator that will somehow advance Capitalism?

Not likely.
Just blame it all on Bernie Madoff!

Robert Rubin needs to write a book entitled, "Buying Time."

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i think mr. bakers opinion is off, if not unfair.
he gave us his opinion and now here is mine:
from what i understand, and after listening to a remarkable interview - i think on 60 min, greenspans major mistake, and one he was remarkably candid about, was that like many republicans/reaganites, he falsely believed in the self-regulating god of beneficence within the industry. he being devout adherent to randian economic philosophy, this outlook is totally understandable. but in reality, what IS evident is the ever-growing movement of greed in this county and rand's political perspective did not take this into account. greenspan's misjudgment, though pretty fucking serious, was not the cause of the meltdown, but rather the machinery that evolved over time that could in no way embrace the concept of responsible stewardship. and as such, the republicans continued belief in this pipe dream of self regulation remains a huge threat to every american citizen. nevertheless, i do not think greenspan was incompetent or some dark maleficent conspirator. he was/is an 'old school' american attenuated to a different point in time that has passed and will never return - think: leave it to beaver or the andy griffith show!
enter the new world order. as in the song "god's away on business," tom waits sings.... "the ship is sinking.... who are the ones that we kept in charge... killers, thieves and lawyers."
as for mr bakers off center synopsis: heckuva job, dean.

It is reckless to think Alan Greenspan and his cohorts did not see or predict the bubble and it's eventual collapse. A close friend and banker warned me of the collapse nearly 2 years in advance. What we failed to do was capitalize on the downturn by shorting stocks. To have had a better sense of timing would have aided us making a killing. Alan Greenspan did have that sense because he raised the short term lending rates in a stairstep pattern leading up to the collapse. Due to the timing of lending dereglation, bankers knew when ARMs began and would reset upward and lenders would fail to make payments. To think that no one could have known allows the same thing to happen again.

It's become very obvious that we have created a "Frakenstein" in globalization. This system has now become non-linear, therefore rendering economics as useless. Get the Santa Fe institute on the problem, before it all goes up in flames.

When the top economic gurus do not believe in fraud, on any level, it is almost impossible to see anything bad coming your way. Greenspan, Sommers and all of the rest need to go back to private life and stay there. Their handiwork is quite evident for all to see.

Rockerbabe1 writes:

"When the top economic gurus do not believe in fraud, on any level, it is almost impossible to see anything bad coming your way. Greenspan, Sommers and all of the rest need to go back to private life and stay there. Their handiwork is quite evident for all to see."

At first reading I saw this as gibberish. On second reading I noticed the clause, "When the top economic gurus do not believe in fraud,..."

We have a sociology of governance in which great crimes are committed and no one (except poor Bernie Madoff) is held to account. Fraud? Aw, give me a break, you didn't read the fine print? How's that mortgage going for ya?

Freud? What is the Nature of the Medium of Exchange?

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