Alan Greenspan - unfair blame for sub-prime crisis? Economic outlook - conference keynote speaker

http://www.globalchange.com Why do people blame Alan Greenspan for the sub-prime crisis? He lead the Federal Reserve Board during the dot-com crash, 9/11 and following years when interest rates in the US fell as low as 1% and America came close to deflation. These low interest years are now blamed for the housing boom, the flood of bad loans and the sub-prime crisis. But is this fair criticism of past economic events in America, with money supply issues, rising unemployment, falling or static economic output in early 2002? Video by keynote conference speaker Dr Patrick Dixon, Futurist and author of 12 books on global trends. Euro, sterling, currency, inflation, central bank, bank, England, interest, rates, control, economy, growth, recession, economic. Future of banking

Alan Greenspan, Federal Reserve, America, American, output, unemployment, 9/11, dotcom, dot-com, bubble, housing, house, price, crash, burst, falling, Euro, sterling, currency, inflation, central bank, bank, England, interest, rates, control, economy, growth, recession, economic

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[BubbFromGEI]

Wow. Seems like you are wrong again, Patrick. wrong about UK property. wrong about Greenspan's culpability. Greenie is a villain for his excessively easy money supply. It was obvious to intelligent observers at the time, and is even more obvious now. Blame Greenie, throw a tomatoe if you ever see him. I will save one for you to throw too.

[pjvdixon]

Quite strong words about Greenspan. It is so easy to criticise with hindsight. He had to manage the US economy during some tough times.

[pjvdixon]

Alan Greenspan talked often about frothy housing market but could not use emotive word like bubble as markets were massively over interpreting every syllable he said. Patrick Dixon

[pjvdixon]

Thanks - I am amazed at how strong people feel about those decisions back then. I am sure if we had actually been in Alan Greenspan's shoes we might have felt pressure to take similar decisions.

[pjvdixon]

What do you think? For more of my videos on this issue SUBSCRIBE to my next videos - press ORANGE BUTTON top left. Also if you click FAVOURITE (red heart) immediately below video, you will help other people find this video and enjoy it too. PLEASE do comment....I try to reply to most comments, but with 10 million different visitors to my sites sometimes it takes me a while. Thanks. Patrick Dixon

[badonkadonk34]

Good video, but I disagree. Greenspan would step over his own mother for one tenth of one percent more of GDP. He never cared about the long term health of our economy. He cared about keeping the party going. He should have only focused on price stability. Employment would have taken care of itself - albiet with deeper cleansing recessions.

[learninglemur]

The economic bust was caused by the Fed -- they held interest rates below the natural rate of interest, creating an unsustainable credit expansion boom.

For the economic details as to why the Fed is primarily responsible, and why it is flying blind, please see the following paper by economist Roger W. Garrison: "Interest-Rate Targeting During the Great Moderation: A Reappraisal".

[Kickboxing187]

America needed 9/11, Afghanistan and Iraq War because when economic growth slows down due to limits of the "real" world. i.e. saturation of markets etc, war is needed to stimulate the economy. We know that USA recovered from Depression in the 30th due to second world war. But the fact exponential growth in a finite world will always lead to destruction (the monetary system enforces that). Every Engineer knows that but economists live in their own world with own physical laws.

[xelink]

my family built their wealth by flipping houses over the past 30 years. We are leaches, we depend on abusing inflation and borrowing other people's money and letting it devalue while their property mantains it's value. In the end, the banks are making all the money while producing no real wealth(admittedly they "offer the financial capital to transform real capital") but so can family relatives and other institutes not comprised entirely of leaches and vermin.

[GemHudson]

Flipping houses does not pay for itself when in a deflationary depression. Not only there is no nothing to spread around. They can not buy any higher for what they want to sold the house. Building wealth is to produce and to sell more than paying out the production cost. That you would have to know your business inside and out.

[masticina]

I fear they might want to blame it all on ONE person. Or ONE institute, yes SEC made mistakes, but so do the FEDS. Also this issue is caused by laws that we're signed in effect BEFORE bush showed up! It is an stacking effect where in the end everybody has the blame!

True if the SEC would have have better control and insight.. but then again wasn't there a huge market deregulation going ahead?

However expect things going very "social". That might be the only way to keep it running!

[dommyxx]

The austraian economics like the guys at the mises institute correctly predicted how and when the bousing bubble would play out. They also manage to explain the boom bust business cycle unlike kaynesians.

[dommyxx]

Because money doesn't come from nowhere. Speculators on wall street do nothing more than stabalize the stock market...

The real problem is government spending and fiat money created without a commodity or an asset to back it. Also how they bailout banks when banks go crazy with issuing credit.

[dopaminebuddy]

How come no one's blaming the greedy , arrogant big players on Wall Street etc coming up w very creative financial instruments and schemes that just blew up in our face?? Greenspan was quite prudent in his approach during tough economic times ....of course , in comparison to what we have now , those were 'dream times '!

[tradingbr]

plus it not like people can really 'manage' the economy, the market is bigger than anybody and does whathever it wants to, no president or central banker can stop it