Soviet Union collapse caused our financial crisis - Greenspan

[Subdivisions]

http://www.theglobeandmail.com/report-on-business/economy/alan-greenspan-traces-housing-bubble-to-collapse-of-the-soviet-union/article1504666/

...snip...

The former Fed chief defended the central bank's actions, saying that the seeds of the housing boom were sown by geopolitical events that were out of the Fed's control, an argument he has presented a number of times in the past.

The fall of the Soviet Union led to hundreds of millions of workers entering the global marketplace, he said in a paper to be presented to a Brookings Institution conference.

This new market-based workforce, Mr. Greenspan said, helped push up growth in the developing world. This in turn fueled a global savings glut that drove down long-term interest rates, leading to an “unsustainable boom” in house prices, he said.

That housing boom, Mr. Greenspan stressed, was not a phenomenon in the United States, alone with 20 other countries also witnessing huge run-ups in home values.

While he acknowledged that markets and regulators misread the risk embedded in the complex financial products that triggered the crisis, he said no regulator can be expected to consistently forecast if a specific product will turn toxic.

...snip...

http://www.theglobeandmail.com/report-on-business/economy/alan-greenspan-traces-housing-bubble-to-collapse-of-the-soviet-union/article1504666/


I knew someone would get to the bottom of this debacle. Well, at least we won't have to suffer a bunch of corporate corruption trials since the suspects are all ex-Soviets and presumably immune from prosecution.

[Brickbat]

1. Oh my sweet bippy, this is the best thing I've read in months. The collapse of the Soviet Union is

the best AND worst thing that's ever happened to us! AWESOME!

[d_b]

2. lol shit yeah

I needed that.

[w4rma]

3. Greenspan needs to go. (nt)

[anigbrowl]

62. Er....he retired 4 years ago. This is just his personal opinion.

A pretty silly one, but on the other hand when he cautioned against 'irrational exuberance' in the markets back in the 90s most people just laughed at him, even though he turned out to be right. I don't really agree with his argument here but it's not entirely misplaced..

[Odin2005]

4. Green$hit as a interesting idea for once?

[mbperrin]

5. to consistently forecast if a specific product will turn toxic.

Well, gee, that's weird, because I've always said that gambling is a non-productive enterprise that saps real capital from real projects, handing it over to those the odds favor to do more gambling.

Where'd I learn that? Gee, in an economics class at Texas A&M in 1973. Perhaps Mr. Greenspan should have played less trombone and studied more eco.

[ParkieDem]

6. Really, Alan?

It wasn't because you and your fellow central bankers -- with prodding from the Clinton and Bush administrations -- kept interest rates artificially low during the late 1990s and early 2000s?

Now, you do have a point when you say that the housing crisis wasn't limited to the United States. But it wasn't worldwide, either. Countries like Canada and Australia came through just fine.

[Tierra_y_Libertad]

7. Yeah, Al. It was all a commie plot.

[NoGOPZone]

8. Well, since the right is always saying Reagan caused the fall of the Soviet Union

That means our financial collapse is his fault.

[eShirl]

13. +1

[KamaAina]

61. In fact, Greenspan has it exactly backwards

the trillions we poured into an insane arms race in order to bankrupt the Soviet Union led us down the road to the financial crisis.

[Monk06]

9. What a complete and utter fantasy. The savings of newly liberated Russian workers

in the 1990s caused the housing bubble.

That's not even an interesting lie. The
Fed kept interest rates low in order to
finance multiple bubbles in tech, the
internet and the housing markets in the
last fifteen years. It also eased credit
to consumers in order to trick them into
not noticing that the Fed was inflating
the money supply which simultaneously
increased consumer spend and debt while
hiding inflation under the rug of excess
money.

[Xolodno]

10. Un-fucking-believable.....

....

I have an econ degree...and that smells like a huge steaming pile of bullshit.

Just for arguments sake, lets say the collapse of the Soviet Union did have an impact as stated. That STILL doesn't account for the recklessness of the banks. If they were well regulated and forbidden to play around on the roulette table, none of this would have happened.

Low interest rates would have just forced people to put more of their funds into other investments.

Lame ass excuse.

[Ian David]

11. So, it's Reagan's fault? Don't the wingnuts keep saying Reagan collapsed the USSR?

When, really, it was Bin Laden and The Taliban more than anyone else.

[Edweird]

23. Man, I was gonna post that.

[RKP5637]

12. These guys NEVER cease to amaze me. We are a country awash with disinformation, half

truths, outright lies, distortions, fabrications, delusional spokespeople and the dysfunctional. And sometimes, just sometimes, some truth manages to escape, but this is NOT one of those times.

[tom_paine]

18. And on those rare occasions when the truth does escape, Corporate M$M just turns the volume down and

moves along to the next missing pretty white woman.

It's not amazing, the hubris of Greenspan. He is as arrogant as a Nazi who also knows that he and his bunch (in this case the American Corporatists as opposed to the German Industrialists) have performed Gleichschaltung on the media and the National Mind.

Google the term if you've never heard of it before and prepare to be enlightened.

[RKP5637]

21. Gleichschaltung, interesting you mention it, I was just thinking a little while ago

with all of the RW stuff in this country is the US moving into the German pre WWII era. So much severe damage has been done to this country, and the twisting of truth today especially by the media is quite reminiscent of political indoctrination of the masses to control and influence their belief systems. Excellent point, Gleichschaltung http://en.wikipedia.org/wiki/Gleichschaltung

I think you made a very good analogy.

[tom_paine]

24. And yet, with things so far along even now, lopsided and Orwellian, 99.999% of people

would STILL look at you like you were from Mars if you tried to mention it.

Or worse, like a 1930s German, would tell you the media is "liberal". (meaning Jewish to a 1930s German)

This nation is heading into madness in which even the best-case scenarios are brutal, barbaric and RW authoritarian.

Our best hope right now is that the American Corporatists keep control of the situation, unlike the German Induistrailists of the 1930s, who wound up playing second-fiddle, still quite profitably, to the demons they had unleashed.

Far-Right Corporate Neofeudalism or Uber-Right Classic Nazi/KKK-like Totalitarianism, those appear to be our future "choices".

[RKP5637]

27. I started to respond in more detail a couple of times, but I know you will

know what I mean when I say I agree, "I can feel it in the air." I'm quite concerned about where we are headed in this country, as you point out, the choices are quite unpleasant, I do think the demons have been unleashed. At this stage I'm still not quite sure which direction they will take.

[tom_paine]

28. Have you ever read "Defying Hitler" by Sebastian Haffner?

It shows that the more things change the more they stay the same.

Obviously, what is going in our our country is uniquely tailored to our more liberal national history and founding myths, but the psychological similarities are undeniable between us and Germany in the leadup to the RW Authoritarian Final Phase. For them, it was Nazism. What will ours be?

A kindred spirit, in agony, speaking to us from the veil of 80 years ago, which is nothing in terms of human history.

I also am uncertain about which direction it will take. The unleashed demons of the idare powerful indeed, but the techniques of manipulation, perception management, and propaganda are many hundreds of times more powerful than they were in the 1930s, not to mention the media "delivery system" of such techniques is literally millions of times more powerful and far-reaching.

[RainDog]

29. great book n/t

[tom_paine]

30. It would be a lot better if we weren't living in a "kinder and gentler" version of it

n/t

[RainDog]

34. Pandering to the right is a sort of "Weimar Democrats" move on the party's part

just like the Weimar govt sided with the conservatives and, ultimately allowed the Nazis to take power.

the good news is that the socialists and communists won in Europe.

even tho there are still right wingers in northern Europe, fascism was utterly discredited and western Europe developed into social democracies.

That's how I hope this all plays out.

In any case, if the beckerheads want to "think the unthinkable" and then do it, I hope Beck is one of the first taken out by by some patriotic vet. I will gladly fight against the religious right in this nation if it means we move past their bullshit. I don't want to, but I'm pretty good with a baseball bat and really angry at the religious right. I won't start the fight, but I will fight.

[RKP5637]

33. Frankly, I find it more than a bit concerning. This has been in the back of my

mind for sometime mulling around. No, I've not read "Defying Hitler" by Sebastian Haffner, I will look into it...

One of the things I find quite disturbing is the concentration of the media into several conglomerates. The power they wield is incredible, as you well know, and many fall victim to their techniques, becoming parrots of the media of their choice, not even knowing. It is a constant undertow, as you well know, of today's political scene, even when the President takes to the media to be interviewed and cross-examined by Fox.

I suppose this is good, but it demonstrates to me the control the corporate elite and media have of the government and the direction of this country. People tend to be on the last rung. The one that comes along and truly harnesses the frustration of the masses and consistently leverages it will be quite concerning as I fear in today's world it will truly be RW hatred and frustration than rational thought by the masses.

[RainDog]

37. the internet has become the samizdat media of the U.S. n/t

[RKP5637]

60. As long as the surveillance does not increase much more. I've always felt the

US with the right political environment could easily become a police state to protect the status quo... of corps., wealth, elite, whatever... if citizens became too irate. All in the name of god and country, etc., etc.

[PA Democrat]

14. Greenspan has added a new character to his economic fairy tale

We now can add the "Ghost of Communism" to the "Invisible Hand of the Free Market" in the cast of characters in the well-loved fairy tale Beauty of Capitalism and the Beast of Communism.

Is it a horror story , an ill-fated love affair or both?

:rofl:

[ljm2002]

15. 100% unadulterated horse poo...

...but amusing to read.

So, the complex financial instruments are not to blame. The games played with giving the instruments AAA ratings before selling them to unsuspecting foreigners, that had nothing to do with it. The regulators turning a blind eye, nope -- how could they be expected to understand these things, anyway? I mean, really?

Nope, it was the WORKERS and worse yet, FORMER COMMUNISTS who are to blame!

Yes, they flooded the world with their sweaty bodies and voila! all of the sudden, things fell to crap, just like that!

Who could have foreseen it???

AARRGGHH!!!!!

[malaise]

16. Bwaaaaaaaaaaaah hahahahahahaha

:rofl:

[Oregone]

17. So we shouldn't of won the cold war now? Does that make our proxy Afghan war bad?

Oh boy.

[jimshoes]

19. Friggin' Ruskies

Causing us to be broke. Does that mean they won the cold war?:silly:

[Cessna Invesco Palin]

20. :facepalm: No, wait.

[HeresyLives]

22. Well he's partly right.

Oh not about the US housing bubble of course, that was purely his screw-up.

But he's right about how the fall of the Berlin Wall, when Gorbachov refused to stop it, changed the world, opened it up, and allowed for globalization.

Suddenly all the former Soviet bloc countries were looking for a wider world and to catch up...and shortly thereafter the Bamboo curtain fell as well.

The rest is history.

The real question is...why is Greenspan only seeing this now?

It was his job to look ahead, to do some forward planning, and to take steps to integrate smoothly.

[NNN0LHI]

25. All the former Soviet bloc countries used to be supported financially by USSR

Now they are supported by us.

We really won, didn't we?

Don

[HeresyLives]

26. What makes you think you support them?

Many of them are in the EU.

[RainDog]

31. Greenspan and Co. tried his disaster capitalism on the former USSR

rather than employing a sort of "Marshall Plan" to help the USSR transition to a market or mixed economy, Greenspan's crew did nothing.

This is how the oligarchs and crime bosses came to be so powerful in Russia. People were seriously hurting and the U.S. acted like so what. So what if nuclear scientists make a little money selling goods and services on the side. So what if prostitution /sex slavery became a huge export from the former Soviet bloc.

The invisible hand that was bitch slapping the former USSR led directly to Putin. This is the result of conservative economic theory in action in the U.S. and the former USSR.

Emmanuel Todd predicted the fall of the Soviet Union in the 1970s when Wolfie and Rumsfeld were screaming about the huge threat that actually did not exist. But we spent mega money acting on their fear-based doctrines - until even Reagan thought they were insane, along with Poopy (sic) Bush. Junior was the one who was such a fucking idiot he let these same assholes run the U.S. into the ground.

Anyway, Todd noted that the USSR would fall because of the number of educated females, the low birth rate and the high levels of education. All of these are markers for more democratic governing strategies. (And, it could be argued, Saudi Arabia's refusal to modernize has been a huge factor in the spread of terrorism among the educated who are left out of their narrow feudal economic/religious policies in governance.)

So the truth is that the U.S. used the Soviet Union as an excuse to spread the nation's resources too thinly among too many nations via military bases and expensive weapons. Yet we continue to claim such policies are necessary. bullshit.

I think it's funny, tho not funny haha, that nations in South America have experienced a renaissance since the U.S. has been too busy stirring up fear about the middle east instead of the threat of commies to the south.

iow, Greenspan sucks.

[HeresyLives]

32. No one helped the USSR

And that was Clinton's fault.

[RainDog]

35. Clinton was and is a "neoliberal."

He sided with the right on economic issues.

[HeresyLives]

36. All of which ideology is irrelevant.

[RainDog]

38. neoliberal is an economic stance. n/t

[HeresyLives]

39. Neo-liberal is ideological rubbish.

[RainDog]

45. I don't care what you think about it. I agree it's rubbish. I'm just stating a fact. n/t

[HeresyLives]

49. Doesn't matter, he did nothing anyway.

Nor did anyone else.

[RainDog]

51. no. Clinton CHOSE actions that the Greenspaners agreed were the thing

that's doing something.

by doing nothing.

[HeresyLives]

52. Oh puleeze.

[RainDog]

58. we disagree. goodbye. n/t

[Grand Taurean]

43. South America's renaissance is one of the great untold stories

and rare successes of the past decade. America did not do anything constructive in this matter.

[RainDog]

46. sure they did. they LEFT THOSE NATIONS ALONE!

rather than using American power to overturn elected leaders like Allende and inserting right wing dictators like Pinochet.

This is still the m.o. they tried with Chalabi. Iraq told them to fuck off.

[Grand Taurean]

47. Inadvertently, they did.

As you said, Bush and company had their head in the sand in the Middle East.

[SoCalDem]

40. B U L L S H I T !

OUR own failure to help the former USSR caused THEIR problems in giving up communism..

Instead of flooding the place with real help and conscientious good will, we stood back and watched the same-ole same-ole..only this time with hardened criminals running amok..and former KGB just changing out of their uniforms, but remaining in control..

[Barack_America]

41. Pathetic. Anything to avoid admitting his own mistakes. nt

[Grand Taurean]

42. Still blaming the USSR bogyman?

It was the lack of regulation that caused this crisis.
It was banks being allowed to leverage debt 20:1.
It was banks placing bets (CDO's) on failure.

Shouldn't you have had the foresight to see what would happen with deregulated markets Alan? Just look no further than the the 1920's.

[marmar]

44. GreenSpin can't deal with the fact that his Rand/Friedman worship caused this mess....

He's trying desperately to rewrite history.

[HeresyLives]

50. LOL no it didn't.

And Rand and Friedman aren't remotely connected.

[marmar]

53. Who said they were? Greenspan is an admirer of both....

..... so I'm not quite sure what you're LOLing. But that seems to be par for the course....

[girl gone mad]

54. If you say so...

:crazy:

[HeresyLives]

56. Friedman was a libertarian.

Objectivists, like their founder Rand, called libertarisans 'hippies of the right' and wanted nothing to do with them.

[spanone]

48. bu$h*/cheney/greenspan is more like it....remember the surplus mr greenspan?

[Kurska]

55. The world would be in a much better position.

If democratic reforms could have taken hold in the soviet union, instead of it just outright collapsing into so many smaller states.

[HeresyLives]

57. ??? It didn't.

Soviet bloc countries remained countries, and most eventually joined the EU.

Russia has elections.

[bridgit]

59. If that's the case then Reagan did if Reagan out spent the Soviets ending the cold war

Like every other RW neocon would have the world believe


And Greenspan stood right there and watched him do it. Is Greenspan even able to see himself as part of the problem?

[upi402]

63. Batshit says what? Ayn Rand took his dream away

and now the angry moneyman is hitting hims big spoon on the highchair. Awww:nopity: Until I see him testifying against the rats that did this I'll not even look at what he says.