Clinton ran budget surplus most of other president over the last 50 years have not. So give the man some credit. What is wrong if Clinton did what greenspan told him. I mean the stock market has climbed nearly 10x during his time.
Ah yes the bizarro ron paul libertarian scoring method. By this measure, Clinton's alleged unwillingness to act must put him in your top 5.
It's a sad day when using the Constitution as a measuring stick to judge a President can be considered "bizarro".
your interpretation of the constitution is suspect, and I do not know this about you in particular, but a lot of political libertarians seem to have a very simplistic conception of markets that is not very accurate.
My problem with Greenspan is with his monetary policy decisions. He effectively caused the housing bubble we are seeing today, by keeping rates too low for too long. In addition he admitted that he did not see subprime problems coming. That is the role of the Fed to understand these issues. On top of that he should keep his mouth shut about the current Fed chief Bernanke. He keeps asserting his opinion about the monetary policy decisions of Bernanke, even though he was the one who led us to the mess we see today.
I think the exact opposite is true. Greenspan defied nearly every rule of monetary policy by keeping rates low but that also helped foster a decade of economic growth that is unparalled and we didn't see any inflation during the process. That's really Greenspan's greatest achievement. The low rates were in many ways absolutely critical to sustained growth during the 1990s. As for the housing situation, yeah the fed might get some blame but its not so simple. We got hit with a recession in 2001 and we were freaking out about deflation. Raising rates in a deflationary environment might be one of the most stupid things anyone could do. (the same thing the fed did right before the great depression and we all know how that worked out) There are so many short term factors that trump long term housing market issues. Another example of what Greenspan is credited with is lowering rates when the Russian government defaulted on loans or lowering rates after 9/11. People were complaining just a few years ago that the Fed was raising rates too fast during the first part of this century. Also, you're giving the fed way too much credit in terms of the housing situation. People saw this coming for years, it was only a question of when. We've had explosive economic growth for more than a decade and we've had it at unprecedented levels of GDP growth. So yes, a bubble was going to happen. There was little the fed could do to cut it down. Raising rates would help but it would also hurt us in other areas as well as send mixed messages in regards to the opinion that economic growth is still strong. Fed policy is so absurdly complex that it's impossible to point fingers on singular issues. Please, Bernanke and Greenspan share very similar views on monetary policy. The only differences are how Bernanke believes our monetary policy should operate (transparency, inflation target) but the actual core of their economic beliefs and fed policy are virtually identical.
I think you should assign at least half the blame of housing bubble to the lenders who adopted criminally lax lending standards.
Other than the Fed issues I mentioned earlier, I believe the individual homeowner who is facing foreclosure today is real person to blame. He/she was temporarily living above their means and now have to return back to reality. This type of subprime borrower usually failed to do their research/homework on what exactly is a subprime or ARM loan. Where is the personal responsibility here? These people believe that taking a home loan is like buying an ice cream cone. A home mortgage is very complex and the least you can do is educate yourself or get a second independent opinion from someone other than your lender. That's the current problem with the most likely Fed funds rate cut we will see on Sept. 18. It creates moral hazard in that if they cut rates, some of these homeowners will find relief, but in the end they haven't learned their lesson in basic personal finance/economics. They will just continue living in their blissful ignorance of Sunday morning football and Hollywood gossip. Granted at one time, Greenspan was saying ARM loans are a good idea, but Greenspan has proven to be a horrible prognosticator of future economic events as history has shown.
Please, are you kidding me? You are blaming uneducated borrowers who were given NINJA loans, low doc loans, no doc loans - with FULL knowledge of this by lenders - who, being professional mortgage lenders are in a much, much better position to know better. Not to mention some of the more hideouswide scale examples of outright predatory lending out there (there was an egregious example from a few months ago that is now pending, a mulit-hundred million dollar scam to sell crackhouses in which the lender, realtor, mortgage broker, lawyers etc were all in on it). They - the lenders - made risky bets - when you issue a NINJA loan, you are giving a loan to somebody who has no job and no income. That is about the dumbest thing you can do as a lender. Hell the NINJA people were smart, they had NO INCOME, so if they default on their loan, they still have NO INCOME - they are no worse off, it is entirely rational. These bad bets were compounded by much smarter people from banks and hedge funds who took this incredible risk and pretended it was candy and packaged it into CMO's, and then sold, traded, borrowed off of it. But yes it is the people at the bottom of the pile who are to blame... it's too bad that hard right has ingrained this reaction into people's psyche. YOur post brings to mind a saracastic column from a few weeks ago
posts like this really upset me because you have no knowledge of lending. Why does a bank pay a loan officer upwards of six figure salary. to make sound decisions. why do the decisions need to be sound, because banks are investing other people's money. its their freakin job, they are the ones who screwed up. and now they are the ones, along with the borrowers will pay. just like the snl scandal when lenders were giving sweetheart real estate loans to their developer buddies who were cashing in on some of the loan proceeds and then those ventures failed. the lender is responsible for the cash he or she lends. that money isn't growing on trees, its someone's investment. and the investor got screwed. and you know, just as much as its someone's responsibility to take a loan out they can afford, its an investor's responsibility to invest his/her money soundly. or an institution's responsibility to invest its money soundly. do you blame the enron stockholders for not taking personal responsibility in the money they lost?
LOL, Its funny how some of you were trashing Greenspan and the fed in other threads are now sucking up to him because he had some nice things to say about Clinton.
I'm not, I find his half-assed explaination as to why he sold his soul for the tax cuts he now realizes to be a mistake to be unconvincing. But that doesn't change the fact that the cuts were a mistake - or that GWB's tenure has been driven purely by politics and less by sound policy. Really it is a rerun of every single aspect of the comprehensive failure of the Bush administraiton. I cannot think of one single thing they did well that they did not later ruin.
I suppose the stock gains that continued throughout the 90's and started in the early 90's had absolutely nothing to do with Clinton's predecessors huh? I'll give him credit for doing a good job maintaining the economy ... I've never bashed him for that. I have other issues with him. However, its not fair to compare what Clinton had to what Bush had. A recession started nearly the same time Bush took office, 9/11, etc. I certainly believe Bush could have done better, but I don't think its as cut and dry as saying stocks went up and we had a budget surplus.
No, the president can't control the business cycle. What the president can do is influence fiscal policy by controlling the deficit. The ways to do this are the two most unpopular things a politician can ever do: raise taxes & cut spending. Conversely the way to mismanage the deficit are to cut taxes & raise spending - which appen to be the most popular things a politician can do. One man went one way, one went another way. Ironically one is far more popular than the other.
The markets grew 10x during greenspans watch. But the biggest jumps came between 1996-2000. Reagen fiscal policies were not very sound much like the current president. You can't spend what you don't have. I give clinton a lot of credit for at least doing that one thing right.
