Back To The Future l Ben Bernanke's World View Fails Him :wtc:

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Gracie W

New member
Alan Greenspan testifying before Henry Waxman?s House committee today:
?I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,? Mr. Greenspan said. ?I have found a flaw. I don?t know how significant or permanent it is. But I have been very distressed by that fact.?


Mr. Waxman pressed the former Fed chair to clarify his worRAB. ?In other worRAB, you found that your view of the world, your ideology, was not right, it was not working,? Mr. Waxman said.







?Absolutely, precisely,? Mr. Greenspan replied. ?You know, that?s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.?


http://www.newyorker.com/online/blogs/georgepacker/2008/10/end-of-an-era-2.html
 
Greenspan has always and will always speak in a manor that confuses everyone. " If I seem unduly clear to you, you must have misunderstood what I said."
 
Greenspans flaw(and many others) is that he does not distinguish - or rather does not recognize a difference between looking out for long term viability, and making a quick buck which may ultimately doom the company.

And it's not really his fault, companies that have good cash flow don't make a habit of broadcasting that their revenue stream is unsustainable. So they go from great to ok to bad in a fairly rapid span of time. There really aren't nearly enough incentives in the current US economy for serious investment and staying in for the long haul.
 
And the failing of those like Greenspan is the refusal to realize that -- when left unchecked -- the capitalist system itself offers competitive rewarRAB to companies that sacrifice long term viability, at least temporarily. But, in doing so, the system ultimately compels companies to sacrifice the long term.
 
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