Busting the Greenspan Myth

Greenspan asserts that self-preservation keeps markets in check, and his invisible hand approach is based on the presumption that getting wiped out of financial existence is enough of a deterrent. But he is wrong for two reasons: Some banks these days are “too big to fail” and backed by their sugar daddy, the U.S. Treasury, so they’re free to bet the pot — which is what led to the 2008 crash. And two: he misreads the human nature to game the system. The more money involved, the more — not less — likely people are to lie, cheat and steal.

The Big Crash of 2008 should have been called “The Alan Greenspan Recession” because no single person contributed more to the conditions that caused the financial meltdown. Now Greenspan is back selling the same snake oil, claiming that the “global invisible hand” will make everything right, no need for strong regulation.

He couldn’t be more wrong. It’s time to bust the myth surrounding former federal reserve chairman Greenspan and his wrong-headed policies before another crash.

I used to believe the myth that Greenspan was largely responsible for the 1990’s economic boom by keeping interest rates low and regulators at bay. So did most everyone else. And indeed, many of his pronouncements are spot-on. But his blunders have been catastrophic, his worldview is naive and his economic prescriptions are thoroughly discredited. Take for example the “invisible hand.”

Greenspan has made a career out of hawking the idea that markets are best left to self-regulate through the invisible hand that guides behavior. The thinking goes that executives will not sink a company on purpose, because of the survival instinct: it’s in their best interest to stay in existence rather than go bankrupt — self-preservation at its best, just ask Lehman Bros or AIG.

Greenspan asserts that self-preservation keeps markets in check, and his invisible hand approach is based on the presumption that getting wiped out of financial existence is enough of a deterrent. But he is wrong for two reasons: Some banks these days are “too big to fail” and backed by their sugar daddy, the U.S. Treasury, so they’re free to bet the pot — which is what led to the 2008 crash. And two: he misreads the human nature to game the system. The more money involved, the more — not less — likely people are to lie, cheat and steal.

Greenspan’s theory survived scrutiny when the system and the individuals running it had more integrity, and the sums involved weren’t astronomical. We really do want to believe the best of ourselves and our institutions, but the globalized, deregulated financial system he helped create is a monster accountable to no one, driven by pure greed and run by kingpins. Fear of the invisible hand isn’t enough when the payday is hundreds of millions or even billions of dollars. Some people will do anything for that money, and did: when the system crashed in 2008, the rats jumped out with golden, diamond-encrusted parachutes, leaving taxpayers with the bill. Those executives couldn’t give a shit what happened to their companies. They feared no reprisal; their wealth made them untouchable.

Back when the movie Wall Street explored the roots of greed, a high yearly pay amounted to several million dollars, equivalent to around $10 million today. These days, top execs can spend that much just redecorating their offices. Faced with this reality, Greenspan’s invisible hand theory appears quaint, even comical, except that it has guided three decades of financial market policy, and his opinions are still influential.

Greenspan labeled the crash of 2008 a “notable exception” to his invisible hand theory — a hand so invisible it isn’t really there. The real exception though is finding circumstances where his theories hold true — and anywhere he still has credibility outside of Ayn Rand circles. Time has proven Mr. Greenspan wrong. The more he shows his face in the public arena, the more he is exposed as a thinker whose flaws are catching up with him.

What's Going to Happen in 2012? Just Look Around!

Even without an Armageddon the situation looks pretty bleak, and these are the conditions predicted to precede the Second Coming of religious figures from traditions around the world: the Christian Jesus, the Muslim Mahdi, the Hindu Kalki, the Buddhist Maitreya (Great Teacher) — expected by their followers to return at a time of unprecedented chaos, warfare and exploitation. That sure sounds like what is happening presently.

The predictions of the Mayans and others about world-changing events due in 2012 has spawned a baffling variety of interpretations and hype. As an author of stories about prophecy and the paranormal I’m just as interested as most people about what to expect, and which predictions paint the most accurate picture. After looking at a broad sampling of information, I’ve come to two conclusions:

Some kind of apocalypse or apocalyptic event (or events) is inevitable, even happening right now. And:

Whatever happens is likely to be different than what’s expected, or a mix of everything expected.

As I write these words in early 2011, a number of possible apocalyptic situations are playing out around the world. You don’t have to be a fiction writer to see for yourself:

Solar storm in 2012? NASA says no.

–Under the category of hype, NASA supposedly warned to expect major solar events in 2012, launching breathless reports of solar storms and pole shifts, but the assertions have been refuted as the opinion of one scientist trying to sell his idea. Lesson learned: don’t believe till there’s verification.

–All too real though is the possibility of crossing over an environmental “tipping point” triggering an apocalypse driven by hunger and desperation. The major wheat-producing regions of the world have been hardest hit by climate change, alternating between epic droughts and torrential floods; the polar ice caps are melting faster with each passing season, eventually leading to dramatic sea level rise around the globe; earthquakes are increasing in frequency and intensity, and as the world saw in Japan, nuclear catastrophe is only a few shakes away.

Need more evidence? There is an environmental apocalypse underway right now — mass animal, bird and fish die-offs; widespread sickness and destruction from oil spills in the Gulf of Mexico and elsewhere — but it’s too depressing to think about. Besides, on the news I see more strikes on Libya, which brings us to another possibility:

–World war is looking more likely with every missile launched and bomb dropped. Dominoes are falling: Tunisia, Egypt, Libya. Unrest is spreading to Syria, Yemen, Bahrain and other countries like Saudi Arabia and China that have so far repressed public demonstrations. Pakistan could be next, and that possibility most certainly would be disastrous for everyone because Pakistan has been pumping out nukes and a large segment of the population is radicalized. Even without a world war there are enough conflicts already raging that could turn apocalyptic. Libya for one has a stockpile of mustard gas and who knows what else, and the old regime swore to go down fighting.

Gadhaffi vows a long war in Libya.

Ruling out a solar apocalypse in 2012, there are environmental and warfare scenarios coming to a head, and we still haven’t considered the threat of a terrorist event bigger than September 11, 2001. Bin Laden is most likely long-dead, but his war lives on, and a new generation of terrorists have taken up the cause. With chaos already spreading, they are likely waiting to deliver a knockout blow at the moment when Goliath is most vulnerable. It’s been part of their strategy from the beginning.

The greatest possibility of that happening is with a devastating cyber attack. Very smart people at computer terminals around the world are, this moment, thinking about how to infiltrate or bring down systems. Our entire infrastructure is based on network computing, and as Iran learned the hard way, saboteurs get around almost any obstacle. Hackers could crash a stock market or a banking, energy, transportation or communication system — a large number of potential targets. The threat is greater than most people realize, and no Internet kill-switch is going stop the damage before it’s done.

Even without an Armageddon the situation looks pretty bleak, and these are the conditions predicted to precede the Second Coming of religious figures from traditions around the world: the Christian Jesus, the Muslim Mahdi, the Hindu Kalki, the Buddhist Maitreya (Great Teacher) — expected by their followers to return at a time of unprecedented chaos, warfare and exploitation. That sure sounds like what is happening presently. Jesus said it would be a time of “wars and rumors of wars,” increased earthquakes, signs in the sky, fear, famine, division.

Edgar Cayce, a prophet of the modern era, also foresaw tremendous changes coming like the kind expected at the end of 2012: coastlines dramatically altered, major cities under water, entire populations shifted inland. The conditions currently exist that could make these prophecies come true, but it’s not God and the Four Horsemen delivering the punishment; it’s the result of our own actions — or inaction in the face of overwhelming proof that humans have made the planet and each other sick. The universe balances everything, and humanity is badly imbalanced, making a major correction inevitable: apocalypse. It might happen to coincide with Mayan predictions about 2012, a time cycle that has already begun and was predicted to be chaotic, ending with a great deluge.

Read the author's novel, which explores Second Coming prophecy and apocalypse. Available for Kindle @Amazon.

If Cayce, Jesus and the other prophets are correct, some sort of Final Battle is also coming, though not inevitable. By studying prophecy I’ve learned that the future is a broad outline of a story driven by forces beyond the control of the characters: us, humanity living in the present day. But the details are certainly within control, and prophets forewarn in part to provide the information needed to dodge the bullet. So while the Mayans foresaw Earth under water, and Jesus predicted unprecedented disasters and wars, and Cayce warned of dramatic climate change, we still have the power to prepare for the future, to carry on, to correct ourselves by learning to live in harmony with the planet and each other. It is within our capability.

When things get bad enough, people adapt. Let’s hope it happens before too late.

Naughty Newt's Whopper: Passion for Country Led to Affair

The Lamest Excuse for an Adulterous Affair Award goes to Newt “Red, White and Screw” Gingrich, who claimed he slept with a woman other than his wife because he was busy serving his country and apparently didn’t have time to service the folks back home.

 

Newt affair
Newt’s latest wife, who he cheated with while married to his last wife, who he cheated with while married to his first wife.

Newt’s affair #3 led to marrying Calista, pictured here at the moment she realized she’d married a serial liar and egghead.

The Lamest Excuse for an Adulterous Affair Award goes to Newt ‘Red, White and Screw’ Gingrich, who claimed he slept with a woman other than his wife because he was busy serving his country and apparently didn’t have time to service the folks back home. What made him so busy back in 1998 was his personal crusade to impeach Bill Clinton for…?

The man living in the glass house is gearing up to run for president and trying to confront the #1 question he’ll face as a candidate: why’d he cheat? So he goes on Christian television and offers the whopper about loving his country more than his second wife, a calculated political move on par with Nixon’s Checker’s speech and Bill Clinton’s vehement denial that he “did not have sex with that woman.”

Newt’s audacity is breathtaking. He has learned from decades of making outrageous excuses for hypocrisy that none of it matters; he only gets more popular with the people that matter: contributors, Fox News and a large swath of Republican voters. He needs the evangelicals, and if not for his adulterous ways he’d be an early favorite to win their vote.

Newt wrapped his stinking turd in the flag and served it up with a big smile, and at the same time probably squashed any real chance he has of making his White House dream come true. As blogger Conservative Wanderer notes, if the stress of being Speaker of the House drove Newt to fuck around, what is he liable to do when he’s President?

If his Republican primary opponents don’t skewer him for being a hypocritical asshole, he’s sure to be the butt of every adultery joke, replacing his arch nemesis, President Clinton.

In fact, Newt could go down in history for this one. People centuries from now will still be talking about the douche bag who actually tried to claim he got some strange because he loved his country so much. Gingrich’s only hope is to slink away before word really spreads of what he claimed. But somehow I don’t think we’re going to get that lucky.