What They Didn’t Tell You – The Financial Crisis Inquiry Commission
What’s it like spending two years doing thankless work that, in the end, is going to be ignored by the very people who asked for your services? The members of the Financial Crisis Inquiry Commission have just found out. Their 662 page report is sinking rapidly into oblivion in official Washington, and is now destined to be of interest only to historians. This was fully predictable. The Commission was given a charter by Congress to tell us who, what, when, and where about the financial crisis, but they were not allowed to explain why. To understand why this crisis occurred would be stepping on way too many powerful toes in Washington, and for this reason the Commission was told not to make any policy recommendations to Congress that would help prevent such a crisis from occurring again.
Though toothless and hobbled by Congress, the Commission has issued a remarkable report, at least by Washington standards. The report reads like the work of an investigative reporter, filled with interesting anecdotes selected from hundreds of hours of interviews with financial experts and market participants. The chapters are organized chronologically from the start of the housing boom to its collapse. Hardly anybody comes out of this report looking good, but of the many people who have reason to hang their head in shame, none appear quite as damaged as Alan Greenspan. He and the Federal Reserve are fingered by the Commission for failure to regulate the banks and other players in the housing market.
The outcome of “Fed Lite”
The central bank operated a regulatory regime called “Fed Lite”, providing little regulatory oversight for the banks, and no oversight for the shadow banking system that blew up under the weight of excessive debt and sparse capital. Fed Lite was founded on Alan Greenspan’s near-religious belief that the markets always weed out inefficient players and excesses, and the Fed’s job therefore is to stay out of the way of the banks they are supposed to regulate. Greenspan later admitted to the Commission that he might have been a bit wrong about the wonderful self-correcting mechanism of the markets. He also admitted that he was out of his depth whenever the staff came to talk to him about technical matters like mortgages, the housing markets, derivatives such as CDOs, and so on.
This was the man who was dubbed “The Maestro” by Bob Woodward, but apparently nearly twenty years of hands-on experience running the central bank was not enough to educate him sufficiently to understand the housing market, much less detect a bubble in the making. Why was someone like him given such a position of power? The Commission is unable to explain this to us, and to do so would require going much further back in time than the housing bubble – in fact back to the 1950s, when Alan Greenspan sat at the side of Ayn Rand, as an Apostle of Selfishness and a prized member of her cult of Objectivists.
Greenspan Shrugged
In his professional life Alan Greenspan has never talked about his days with Ayn Rand, and curiously no one in Washington has bothered to ask him publicly about how much of her philosophy he believes. As Fed Chairman, if Greenspan was a maestro of anything, it was playing Washington politics, and he was always wise enough never to tip his hand on policy matters until he had to. By the time the Fed was ready to implement Fed Lite, the mood in Washington had already shifted in favor of the Republican campaign to reduce government regulation wherever possible. This meant not only allowing market operators to function unfettered, it meant giving the wolves access to the henhouse. Insurance and oil industry executives were allowed in to Congressional staff meetings to help write laws governing their industries. Bankers were appointed to top positions at the Treasury and the Fed. As far as Wall Street was concerned, the traditional balance between Greed and Fear was upended: Fear was banished and Greed was allowed to run rampant once bankers were given access to unlimited taxpayer money in the form of bailouts.
All of this was quite congenial to Alan Greenspan, the inventor of the “Greenspan put” – which was a phrase created by the market to characterize the promise by the Fed that any serious losses in the market could always be “put back” to the government. Time and again Greenspan oversaw one bank bailout after another, and then expanded the franchise to the hedge fund industry when he bailed out LTCM in 1998. By the time he retired from the Fed, the financial industry had become so large that the Greenspan put had become institutionalized, and is now referred to as the Bernanke put. The job of Chairman of the Federal Reserve apparently carries with it the promise to forever protect the markets from their mistakes.
Only the “Worthy” Succeed
This must be quite satisfying to Ayn Rand followers. In their mythology, only Worthy Individuals are allowed to succeed in life, by taking what they want from others, and fighting off the little people and bothersome bureaucrats who obstruct them because they are envious of anyone who succeeds. Alan Greenspan must view himself and the eminent people he associates with as the Worthy few, entitled to their wealth and position of power. As a Republican, Greenspan has had no problems with the evolution of his party into the protector of the privileged few – the Lucky Duckies who control nearly 90% of the wealth in America, and feel entitled to raid the Treasury whenever they need to cover up for their mistakes.
This is the problem the Commission has had in doing its work. It is operating in a political and social environment in Washington that for decades has glorified greed and selfishness, and so accepted are these qualities that an alternative universe where government helps the average person rather than just the wealthy person is simply too hard for people in Washington to imagine. The best the Commission can do is say “Alan Greenspan should have done this, and he shouldn’t have done that.” It cannot say that there is something deeply corrupting in the way politicians of both parties think and act in Washington.
That is also why this Commission is so very different from the Pecora Commission of the 1930s, which took as its job the exposure of corruption and fraud at the very highest levels of business and government. The evidence of corruption and fraud in the housing bubble and during the credit crisis is mounting every day, but no one of responsibility or power has been called to account. The Commission has apparently identified a few low level functionaries for the attention of the Justice Department, but it is unlikely that someone like Angelo Mozilo of Countrywide is ever going to wind up in court on fraud charges. There is no moral outrage in Washington anymore, because there is simply no telling whose head would not fall under the guillotine if the true extent of fraud and corruption were revealed.
“Greed is Good”
The American people don’t have much moral outrage either. For the longest time they bought into the Greed is Good philosophy as long as the stock market was going up, and the housing bubble was in the ascendant. Once both of these financial props collapsed, misery spread everywhere, but it wasn’t the misery experienced by our grandfathers, who lost all their wealth in the 1930s when the banks collapsed completely. Most Americans are holding on to some of their wealth, and 80% of them have full time jobs, even if the work is stressful and the benefits are disappearing. Unemployment checks are being extended for another year, payroll taxes are scheduled to be cut in 2011, and Ben Bernanke has spent over half a trillion dollars generating another stock market bubble. The wealthy are spending money, which helps the retail sales numbers look good, and the Fed assures us that inflation is not a problem, because the Fed excludes the price of food and energy in its calculations of inflation.
Of what use, then, is a Commission that explains why things really happen the way they do? No one wants to hear it – not the Congress, not the White House, not Republicans, Democrats, nor independents. No one wants to hear that the American Dream – which use to say that anyone could succeed in America with hard work – has been polluted by a wholly different American Dream, which now says you can succeed with the right connections and you can take what you want without any consequences. We have brought the philosophy of Selfishness to its logical conclusion, which has left us with a society of individuals who are isolated from each other, who have been stripped of any sense of community, and who have been taught to expect that government will be of no help to you unless your are in a position of privilege and power.
What America really needs is a Commission of Truth, that would outline how Selfishness became triumphant, how it has devastated our country, and what we as a community and as a nation must do about this. A Commission of Truth, however, needs to have an audience willing to listen to the truth, and such an audience does not exist in America. At least not yet – not until Americans have experienced the full, bitter fruits that a lifetime of Selfishness can produce.
February 3, 2011 -
Posted by aletho |
Corruption, Economics, Supremacism, Social Darwinism, Timeless or most popular
Aletho News
Aletho News 
A Commission of Truth, however, needs to have an audience willing to listen to the truth, and such an audience does not exist in America. At least not yet – not until Americans have experienced the full, bitter fruits that a lifetime of Selfishness can produce.
I don’t believe these selfish ones can EVER be open to the truth. They are evil, thus evility requires lies to soothe the nonexistant ‘soul’. They are too immature, evil, selfish,egotistical, shallow, et al, whatever the rest entails.. I have never been a fan of idiocy..Or the wealthy. I have always seen them as shallow pots of empty clay, void of any meaningful existance. Politics has always been evil… From the beginning, and I should think no mercy should be shown to anyone who holds the public responsible for all the perks paid to them. UNDER the table of course. As one body, they all seek power/money/recognition,sex,booze and sodomy. That is who they are. NOT my kind.. as for Ayn Rand, this article has it quite the opposite. I have read all of her novels, and I have in my collection each book that she wrote. Although I don’t agree with all that she wrote, I do know that when she was 9, she wrote her first book, her father took it to the publisher, who told him to destroy it, that she would be trouble. Only individualistic minds could be trouble. SHE did NOT advocate the elite at ALL as being special… au du contraire!! She HATED the elite… she came from russia in the days of the revolution, she KNEW that regime was evil, came to amerika, saw the welfare system, KNEW THAT to be the demise of ANY country… I could go on and on about what I know about Ayn Rand… you better tell another audience the evility of her because you are either IGNORANT, or just a LIAR.. maybe just an uninformant nincompoop, you best know what you are talking about, because I can spot a lie anywhere… Alan Greenspan, as all of you in govt.. are evil, corrupt,and money hungry.
‘ in fact back to the 1950s, when Alan Greenspan sat at the side of Ayn Rand, as an Apostle of Selfishness and a prized member of her cult of Objectivists.’
This statement is bogus and B.s… Ayn was NOT selfish at all but she WAS an Objectivists, which any of you in washington, consider to be a crime… you guys fuck up a part of the story which makes the WHOLE of it a LIE. God to hell, where you belong… LIARS
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How can you try to tell people that Ayn Rand was not selfish? She wrote a book entitled “The Virtue of Selfishness”.
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If you read alot of her books, or even one, would tell you she thought her own thoughts. You know how people want to be ‘part of a group,’ or to ‘belong, to be like others’. That is just an inherent part of human make-up. It really doesn’t MEAN we ‘belong’ but it ‘appears’ to the human psyche that we do. I know exactly what I am talking about. I have always been individualistic in my thinking. I don’t think like the world wants me to, so I am an ‘outcast’ of the world. It is my choice to be different, to have my own opinions. It took 65+ years to know what I know.I like being where I am. I understand what Ayn is saying. She liked the person who was ‘out of the box’.The ‘individual’ who knew the truth, and couldn’t be bought by the lies. She said to be ‘selfish’ was to care more about yourself than others.. it was not that she cared what others thought about her.. she was ‘selfish’ in the regard that she wanted to be her own self. She was always an outcast, more than ‘accepted’. I don’t agree with every philosophy of hers, but I would rather be by myself, knowing and believing the truth than be with ‘the crowd’, sucking up to what they believe is lies. If you read ‘The Fountain Head’ you can see how ‘the crowd’ or the leaders of the crowd treated the talented architech who wouldn’t cave into drawing the ugly buildings that were accepted. He was scorned and hated, but he was to his own self TRUE. If you read Atlas Shrugged you will understand how the governments of the world feed the masses drivel, and if you don’t check out the truth, which is often hidden, you will still know deep in your soul, that what they are saying is a lie. This book was written years ago, but it shows what will happen to a society when they buy in to the governments lies. We the Living is another novel in defense of the individual. It could be written by the Freedom fighters of Egypt. She proclaims the same explosive philosophy, and is the most significant right of humans. The right of the individual to the pursuit of his own happiness. It isn’t pretty to see a gang of thugs beat a kid who ‘isn’t like them’. That is what society tries to get the population to do. Beat those who aspire to a different diminsion, one out of this evil one we are in, and THINK FOR OURSELVES. It isn’t for the weak, zulu, but we have only one life to stand up for the ONE who we are fighting for, and no matter how many times I am ridiculed, called freak, etc., I will NOT be less than who GOD made me to be. The ones who do that to us, are from satan, and he is losing, in fact, already has lost. They hate anyone to ‘think’. It was the same way in Ayn’s days, she came from Russia, she knew what being an individual would cost. I am alot like her, and I have known a few others like us, but not many. They hate those who are grounded solid in what they believe. She believed in Freedom, I believe in GOD (who IS Freedom). She doesn’t have the privilege of living with Him for ever. I do. It is individual choices that we made in Heaven in the Great War.
Did you read The Virtue of selfishness? Nothing is as is seems, Zulu.. everything the world has told us has been one big fat lie.
THANK YOU Aletho News, for allowing freedom of expression.
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I have read the Virtue of Selfishness [as well as Atlas Shrugged and the Fountainhead]. I, like you, have been a person who does not think like many of my peers. Ayn’s arguments were flawed because she seemed to project an honourable character on those who were truly selfish. In reality those people who are truly selfish are the one’s like Alan Greenspan who will do anything to increase their wealth and power killing millions in their wake.
I totally agree with the big fat lie concept…starting with organized religion. The most effective and enduring form of mass control yet devised!
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I agree with what you are saying. In true fairness, I started reading her books about 20-25 years ago, and I have become much more attuned to what I read and hear, as my understanding of who I am, and why, where I came from, and why, and why all this suffering on earth, if God is God. When EVERY thing you hear and read in this country is based on lies… I mean EVERY thing, and the false god agenda, is beyond the limit, but we have to understand, why this planet is so isolated from the rest of Almighty Gods creation of thousands of galaxies, and they are all inhabited by God loving peoples. Then we understand this planet was created to be hell/judgement for the fallen/disobedient/evil angels and their seed, Gen. 3:15. But ‘the womans’ seed will crush them! The book they worship is nothing but lies, however, there are smidgeons of truth, if that is what we are looking for. We don’t have to look far, although it is easier now with the internet than when I started searching for truth, right out of the womb it seems, I remember disagreeing with what the baptist/catholic/whatever..(they all have the same agenda, for us to worship a fake, do nothing myth) preacher was trying to get the congregation to believe when I was 5. It is a monumental lie against the peoples of earth, but God said: they would rather believe the lies instead of truth. But that enabled them to continue feeding us lies, but the more we understand, the more we rebel against these powers of the earth. We live in the age of the apocolypse, where all these lies are exposed, and God says, they still refuse to repent. They are the same rebellious lot that tried to become bigger than their creator in Heaven… foolish then, foolish now. God is controlling the uprisings in Tunisia, just look how that started, one man setting himself on fire, now Egypt.. read Habakkuk and see what God is planning to do to babylon/amerika/et al, and you can see the powers of the world crumbling, and the people seeking JUSTICE, uprising. And it is time.. the people will win, by God taking us to Heaven, and then judging the evil ones, who CHOSE to be evil, mind you….
This fellow and I have been talking about his video..
http://www.youtube.com/user/PunkersTV
I have seen ‘visions’ before, and this was so exciting to see… this guy had been watching Al Jazeera on cable, it was switched to an update on Egypt, and he captured this.. then I read someone quoting Habakkuk, and I read that and it’s plain to see that God is telling us HE has complete control over this fight for FREEDOM, and HE can make it happen, and He has plans to do it, and He is showing US!. It doesn’t get more exciting than that.. People say my opinions, when I choose to reply, don’t have a place in the conversation. God has a place, a MAJOR place in EVERY conversation. He is the only reason you and I are here. I like to say, we, in our very few numbers, have a way of equalizing the whole situation.
Back to Ayn Rand. I don’t care about her and her opinions, I know she was an avowed atheist, so she will rot where she chooses to be. I believe this whole subject matter was for you and me to share our opinions and see that we are not alone. I happen to have respected all of your opinions. You are someone I am going to know when we get home.
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