Replies to post #74768 on Zeev's Turnips Patch-No Politics (ZEEV)

[Sandy Mack]

It is indisputable that Greenspan understood the problem in plenty of time to address it and prevent the bubble.

mlsoft...While I agree that Greenspan had enough foresight to see the problem coming, I disagree that it is "indesputable" that he never addressed it, or even that he, alone, had the power to prevent it. Such a view would suggest that the Fed Chairmanship is a position of "economic dictator" entirely autonomous with respect to the rest of government, and that, I think you'll agree, is simply not the case.

Sandy

[Public Heel]

Mlsoft - I don't think Greenspan could have done much. After his "irrational exuberance" speech, the Market recovered quickly. If he had given another, the same thing would have happened. By the third or fourth time, people would have ignored him.

He could have tried raising interest rates, but all the Kudlidiots of the world would have screamed to high heaven, and he quite likely would have been outvoted in the OMC.

Even if he'd been able to raise rates and choke off the bubble, he'd know that he would forever be blamed as the person who killed the greatest bull market of all time. The ensuing downside would have all been "his fault".

Sometimes, these things just are too strong, and they have to play themselves out. I'm not blaming anyone for it.