Posted under Economics
Apparently the Grand Poobah of all Money (a.k.a Alan Greenspan)Â wants you to believe he’s unfamiliar with the concept of “Greed” and how making lots and lots of money in a short period of time has a way of making a man cease to think rationally or worry about long-term planning or whether all the money you’re making rests upon a House fo Cards. This apparently never occured to the man who once worried about “irrational exuberance” or whatever that means.
So the Grand Poobah of all Money plays dumb because he does not want to admit he knew exactly what he was doing all along. He made money easy to get for dot com companies and home buyers because he knew that in an age when consumer spending rather making things was the real basis of U.S. wealth, it was important as much money flowed through system as possible to basically repeal the business cycle.
Well the Grand Poobah failed, and now he’s just plain old Alan with his reputation ruined for creating the mess we’ll be spending years to clean up and it couldn’t have happened to a more wonderful person.
The moral of the story, never abandon your Randianism.
Weaver on 24 Oct 2008 at 7:01 pm #
Buchanan never would have let this happen. Buchanan knew the manufacturing base is largely what supports the rest of the economy and that increased foreign competition isn’t a good thing… Americans ought to spend their paychecks on investments, not consumption – Buchanan knew this.
Greenspan was a defender of NAFTA and lower tariffs too.
roho on 24 Oct 2008 at 8:22 pm #
Greenspan is like the cheezy umpire that can be bought in a sporting event!
Perhaps an urban legend, but a friend told me that a Leaman Bros broker made $5,000,000 in (17) days?
Andrew T. on 25 Oct 2008 at 3:58 pm #
Contrary to supply-siders and Keyenesians of all stripes, saving and investing is the hallmark of economic prosperity and security, NOT spending. Rampant spending outside one’s own means is driven by artificial, highly temporary capital gains from inflationary policies, and will always lead to a crash, because the average consumer lacks any buffer against an economic downturn.
Almost everyone I know goes from paycheck to paycheck, stretched out between bills, food, and gas payments at all times except for right after a paycheck. I, on the other hand, a 19-year-old, save well over 50% of what I earn. I drive as necessary. I spend tens of dollars rather than hundreds on precisely the technology I know will fit the needs I have, instead of the latest, flashiest top-of the line tech, I own no clothing that cost me over $80, but remain well dressed (and that doesn’t mean it has to be made by Gucci or Paul Stuart). I plan to invest in gold when I get older, but never the stock market, a sure loser’s game for nearly everyone involved. I will not buy a house until I am absolutely ready, and of course will never commit the financial suicide that is a variable-rate mortgage. I’d rather not take one penny from the government, but I do admit to taking advantage of student loans and grants. If the economy was not so degraded by socialism, taxation and inflation, I’d never let myself do it, but it’s now the only way for me to pay for college realistically.
Does my life suck? No, it doesn’t, and I’d have it no other way. I am very happy with what I own, and I am confident in my belief that I’ll maintain a distinguished level of financial security as long as I continue being frugal and possessing of fiscal restraint.
Weaver, Buchanan is a poor economic authority. He should stick to culture, because that’s his strong suit.
Andrew T. on 25 Oct 2008 at 3:58 pm #
Contrary to supply-siders and Keyenesians of all stripes, saving and investing is the hallmark of economic prosperity and security, NOT spending. Rampant spending outside one’s own means is driven by artificial, highly temporary capital gains from inflationary policies, and will always lead to a crash, because the average consumer lacks any buffer against an economic downturn.
Almost everyone I know goes from paycheck to paycheck, stretched out between bills, food, and gas payments at all times except for right after a paycheck. I, on the other hand, a 19-year-old, save well over 50% of what I earn. I drive as necessary. I spend tens of dollars rather than hundreds on precisely the technology I know will fit the needs I have, instead of the latest, flashiest top-of the line tech, I own no clothing that cost me over $80, but remain well dressed (and that doesn’t mean it has to be made by Gucci or Paul Stuart). I plan to invest in gold when I get older, but never the stock market, a sure loser’s game for nearly everyone involved. I will not buy a house until I am absolutely ready, and of course will never commit the financial suicide that is a variable-rate mortgage. I’d rather not take one penny from the government, but I do admit to taking advantage of student loans and grants. If the economy was not so degraded by sociailism, taxation and inflation, I’d never let myself do it, but it’s now the only way for me to pay for college realistically.
Does my life suck? No, it doesn’t, and I’d have it no other way. I am very happy with what I own, and I am confident in my belief that I’ll maintain a distinguished level of financial security as long as I continue being frugal and possessing of fiscal restraint.
Weaver, Buchanan is a poor economic authority. He should stick to culture, because that’s his strong suit.
Weaver on 25 Oct 2008 at 10:03 pm #
Andrew,
you’ll have your capital working for you. I pretty much do the same thing of saving all I can, though I was in debt during college.
What kills a lot of people is kids. The tax burden makes having kids too expensive, leaving very little to invest with… And those who don’t save their capital as you’re doing become wage slaves if they’re not well trained/educated.
fellist on 27 Oct 2008 at 12:05 am #
Andrew, if you’re already saving you should get into gold and silver (I favour silver) as soon as possible. Prices are artificially low right now, but I’m not thinking short term, get it and keep it.
The ONE disappointing thing I’ve ever heard about Buchanan was his when his investment portfolio was disclosed and found to be chock full of overseas investments. That said, his economic ideas served America and Britain well when they were building prospority and industry, and do well today for countries like Singapore and Hong Kong.
What do you say to the numbers Buchana cited in his Vdare NAFTA articles, Andrew?
quote:
From 1860 to 1913, the United States was the most protectionist nation on earth and produced the most awesome growth of any nation in history. In 1860, the U.S. economy was half of Britain’s; in 1913, more than twice Britain’s.
In 1920, Warren Harding and Calvin Coolidge won a landslide, cut income taxes from Wilson’s 69 percent to 25 percent and doubled tariffs. America went on a tear. When Coolidge went home in 1929, the United States was producing 42 percent of the world’s manufactured goods.
Who were America’s protectionists?
Alexander Hamilton and James Madison moved the Tariff Act of 1789 through Congress. Aided by Henry Clay, John Calhoun, Thomas Jefferson and John Adams, President Madison enacted the Tariff of 1816 to protect U.S. infant industries from British dumping.
Abraham Lincoln used Morrill Tariff revenue to fight the Civil War. The 11 GOP presidents who followed, from 1865 to 1929, all protectionists, made America the greatest industrial power in history, with a standard of living never before seen. Mocking protectionism, McCain is repudiating Republican history and all its achievements up to the era of Dwight Eisenhower and Richard Nixon.
America rose to power behind a Republican tariff wall. What has free trade wrought? Lost sovereignty. A sinking dollar. A hollowing out of U.S. manufacturing. Stagnant wages. Wives forced into the labor market to maintain the family income. Mass indebtedness to foreign nations, and a deepening dependency on foreign goods and borrowings to pay for them. We have sacrificed our country on the altar of this Moloch, the mythical Global Economy.
/quote