Robert Paulson is from Fight Club, not the Federal Reserve ("his name is Robert Paulson"), and Greenspan's successor at the Fed has been Ben Bernanke. Henry Paulson (also known by his nickname "Hank" Paulson) is the US Secretary of the Treasury.

Greenspan is willingly shouldering some of the blame and you people are trying to take that away from him. Don't deny him of his sweet, sweet moment.


@ MycroftHomlz: Greenspan was wrong. He should have done things differently. Suggesting that Paulson, John W. Snow, or Ben Bernanke should hold more blame than Greenspan is absurd. He's even admitting that himself. What should be noted, is that hindsight is 20/20, but that doesn't detract from the fact that Greenspan has the humility to admit his mistakes.


@ Retroboy: How was his policy as solid as it could have been, given the times? Are you suggesting that other government officials had holes in their policies, given the times, and that makes it okay?


@ Netrunner: You left something out. " This isn't a 'it's all Greenspan's fault' video, this is a "even Greenspan realizes that conservatives and Greenspan himself [were] fundamentally wrong about the nature of economics" video.

>> ^MycroftHomlz:
We should not scapegoat Greenspan for Bush's mistakes. Besides Robert Paulson has been in charge of the Fed for 2 years.
Greenspan did a great job. Probably the best job anyone has done in government in a long time. He just couldn't make the economy absorb Bush's mistakes and reckless spending. He is not a soothsayer and he isn't perfect.
The fact that he is accepting some responsibility for whatever mistakes he made says a lot about him, but blaming Greenspan for this is just nonsense to me.


This isn't a "it's all Greenspan's fault" video, this is a "even Greenspan realizes that conservatives are fundamentally wrong about the nature of economics" video.

We should not scapegoat Greenspan for Bush's mistakes. Besides Henry Paulson has been in charge of the Fed for 2 years.

Greenspan did a great job. Probably the best job anyone has done in government in a long time. He just couldn't make the economy absorb Bush's mistakes and reckless spending. He is not a soothsayer and he isn't perfect.

The fact that he is accepting some responsibility for whatever mistakes he made says a lot about him, but blaming Greenspan for this is just nonsense to me.

>> ^deedub81:


The whole world's economy is still smarting from the U.S. marketplace's screw ups.

The U.S. bailout, and the coordinated bailouts in other countries, seem to be helping thaw the credit markets, now that we're following the advice of our socialist allies in England and France on how to structure it, by buying equity in the failing banks (something Paulson originally said he'd never do, because it's socialist, BTW).

I don't know what's wrong with South American countries, but I don't think socialism is a universal good, either.

In my view, there's a "just right" amount. Too little, and shit like this credit meltdown happens. Too much, and people cease to be motivated by self-interest.

Europe seems to have a pretty good balance, and it's to the left of where we are right now in this country.

This "libertarianism or bust" attitude just busted. No government policy made this get this bad. If the market was so much wiser than government, how did they not see this coming, and avoid it? Claims that the government "forced" banks to overextend themselves are completely, utterly false. They did this to themselves, and conservatives who're paying attention should know that.

If you're ready to throw Bush under the bus as being a socialist, why do so-called socialists like me hate him with a passion for his blind adherence to conservative philosophy?

Do you deny that Bush brought us to the most conservative policy structure we've seen in 30 or 40 years?

With all that juicy conservatism, how could anything possibly have gone wrong?

Why is the economy a big losing topic for McCain? Aren't arch-conservatives supposed to be the masters of that subject?

Why doesn't this chart show Republicans being universally superior?

I wish I had the time to learn more about this. Thank you for staying on top of it NetRunner!

In reply to this comment by NetRunner:
The plan as passed does call for actual purchases of assets -- it's not just a $700 billion giveaway.

In the Paulson plan, the assets being purchased are the bad loans. In other words, the worst of the crap that's out there, and the least likely to be worth anything.

In the alternative plan that seemed to have become the consensus late in the process, was for the $700 billion to be used to buy stock in the failing banks themselves; nationalizing them, at least to a degree.

That way the banks have some capital they can use to continue to issue loans, and the government can fire the dickheads who screwed the company up, and hire a new set of dickheads to screw it up, then sell the shares on the market, and potentially make boatloads of profit for the taxpayers (at the expense of the current shareholders).

Instead, the Bushies want to try to protect the shareholders from their own failures, by buying off the bad investments with taxpayer moolah, so that we absorb all the losses from their bad decisions.

Word is, thanks to the corporate pay restrictions on the bailout, almost no one is opting in. They'd rather see the global economy crumble than lose the opportunity to buy a 3rd private jet.

We're probably going to have another shot at the bailout before long.

Here's hoping we have a President-Elect Obama by then.

The plan as passed does call for actual purchases of assets -- it's not just a $700 billion giveaway.

In the Paulson plan, the assets being purchased are the bad loans. In other words, the worst of the crap that's out there, and the least likely to be worth anything.

In the alternative plan that seemed to have become the consensus late in the process, was for the $700 billion to be used to buy stock in the failing banks themselves; nationalizing them, at least to a degree.

That way the banks have some capital they can use to continue to issue loans, and the government can fire the dickheads who screwed the company up, and hire a new set of dickheads to screw it up, then sell the shares on the market, and potentially make boatloads of profit for the taxpayers (at the expense of the current shareholders).

Instead, the Bushies want to try to protect the shareholders from their own failures, by buying off the bad investments with taxpayer moolah, so that we absorb all the losses from their bad decisions.

Word is, thanks to the corporate pay restrictions on the bailout, almost no one is opting in. They'd rather see the global economy crumble than lose the opportunity to buy a 3rd private jet.

We're probably going to have another shot at the bailout before long.

Here's hoping we have a President-Elect Obama by then.

But the Bernanke/Paulson-Finance-Czars Bill is the only chance to stop the 2nd depression! "Government Inaction" is going to ruin us!

Pick up the latest Time magazine for a real handbook to sheepdom.

In reply to this comment by NetRunner

Unless you're holding back a PhD degree in economics, I'm not sure we know enough to say anything more definitive than that there are multiple schools of thought on economics, and the consensus of those who run our economy is closer to Krugman than it is to Ron Paul.

The four competing economic schools of thought in the United States, historically, have been:
1. Keynesian
2. Austrian school
3. Chicago school
4. Marxian
There are several dozen other schools. Modern economics was invented in 1776 when Adam Smith published "The Wealth of Nations", the principles therein, which survive and are accepted to this day. Ron Paul is a member of the Austrian school--this is the same school as the economists at www.mises.org. Paul Kruger, like the majority of US economists in the last 80 years, belongs to the Keynesian school of thought.

The Keynesian school of thought has been the dominant school in the United States in the last 80 years. Keynesian economics claims that the state can stimulate economic growth through interest rates, taxation, and public projects. You can see how this thought meshes really well with the government we have today. For a Keynesian, this is the economic basis for the Federal Reserve.

In the last 80 years, Keynesian economics has been so thoroughly disproved, I myself do not understand how anyone considers it viable. Keynesian policy was single handled responsible for the great depression (see Murray Rothbard's "America's Depression") and there is no doubt that bubbles, such as the latest housing bubble was caused by state manipulation of interest rates (http://mises.org/story/3130). The idea that we can spend ourselves out of a recession has been thoroughly disproven (http://jim.com/econ/chap04p1.html). The reality is that during a recession, excess credit only causes a depression. This is because artificial credit impedes production (http://jim.com/econ/chap06p1.html). Artificial credit conceals the information that producers use to know how much to produce, and consumers use to know how much to spend. This is why Paul Kruger thinks that we can spend $700 billion to save this economy, and that he and Paulson (another Keynesian) believe the economy can be cured simply be lowering interest rates. Their ideas have been historically proven to be false, but the reason they remain popular is that an economic policy which sanctions government control over interest rates, and increased taxes, and large spending projects is politically desirable for obvious reasons. Even if these ideas seemed viable at one point, that is clearly no longer the case--the fallacies of Keynesian economics have caused ever major recession, shortage, and depression in the last 100 years. The Keynesian policies enacted by Germany, which lead to hyperinflation and the economic collapse are what allowed you-know-who to come to power. There is an argument to be made that Keynesian economics is partially responsible for WWII. Beyond that, the evidence that it is a failed school of economics is overwhelming. This is why you shouldn't trust any Keynesian economist who claims to have a solution to this mess--because it was their policy who got us into it.

In reply to this comment by NetRunner:
Paul Krugman for one, and I've seen a couple other articles that've tangentially mentioned it as being a bad decision.

Paul Krugman should no longer have any credibility, all of his economic theories have been systematically proven false. His theories are the precise reason we are in this mess. He is of the same school of thought as Paulson. These are the people who got us into this mess, we shouldn't be looking to them for answers on how to get out of it.

www.mises.org is the most-cited academic source for economics, and the most-viewed economic website in the world. It boasts the support of several distinguished Nobel prize winners, and the hundreds (thousands?) of economists which comprise it support what Ron Paul is saying, and has been saying for decades.

I believe that is the same petition.

So it's wrong to be guided by the principles of the Constitution, and to make his allegiance to those ideas?

I don't know what state you live in, but I don't see how watching the Federal Reserve so they don't destroy the dollar counts toward the destruction of your way of life. Unless you're Henry Paulson.

Are you Henry Paulson? Because, if so, I've got some words for you.

>> ^volumptuous:
Other than repeatedly screaming out the word "constitution", his platform doesn't and has never contained one progressive theory that moves our country forward, and improves the lives of citizens.
If my state adopted his domestic policies, my lifestyle would be drastically and negatively changed forever.

Though I'm a Democrat, I'm glad the bill didn't pass. It gave Paulson WAY too much discretion. So God bless John McCain, for being an effete leader!

has anyone here heard of 1921? probably not right? Thats because when that recession hit, the government didn't step in and the market corrected itself in less than 6 months.

how about 1929? probably yes right? The great depression was caused by government intervention. Case in point, when people were on the streets starving in bread lines and eating ketchup sandwhiches, the government was busy burning 10,000,000 acres of crops and slaughtering 6,000,000 pigs! Yes you heard that right! The government was operating on the principle that if they reduced the supply they would increase prices and thus help out the farmers. Absolutely insane!

This is the same school of economic thought we have with us today, its the same erroneous thought Paulson and Bernake subscribe to. They think that the government can turn on the printing press and solve all the problems (of course they aren't naive, this makes them a lot of money--Paulson made $50 million last year). If that was true, why don't we just keep on the printing press even when the economy is good? Why not print the money to solve all our healthcare and energy problems--shoot why not cure poverty if we can just infuse money out of thin air into economies to fix them?

The government doesn't create wealth. The government cant improve the economy, it can't fix a recession, all it can do is take from A and give to B. All it can do is take your money and give it to AIG or Fannie Mae. It can create money, but it cannot create wealth--that is something only the market can do.

In my opinion, anyone in a position of power who is knowledgeable about economics, and tries to blame this on anything aside from the CRA or the federal reserve should be charged with fraud and sent to jail for a LONG time.

1. greenspan
2. paulson
3. bernake

come to mind.

And NetRunner, 3 out of 5 of the authors conclusions are complete nonsense. (2,3, and 5). This was CRA+federal reserve and theres just no way around it. His credientials as a tax lawyer say nothing about his credibility as an economists. Sh*t most economists credentials as economists say nothing about their credibility as an economist--why do you think we are in this mess!

Members of the Austrian school of economics have been screaming about this crash for the last 30+ years!

^do any of you have any idea how hard it is to achieve a monopoly in a global market?

next to impossible. and the only thing preventing people from obtaining products from global markets is government interference (tariffs)

i'm going to make an assertion here, it is based on evidence (your posts above). nobody here has any idea why free markets work. this, i assert, is why all of you disagree with a free market system.

heres the problem you all have..you think that a free market is economic anarchy and its just not true. there is massive amounts of regulation and oversight, its just not from some small group of dictators (who as we've seen usually act in their own interests aka paulson who made 50 million last year). this is the beauty of free market theory...it intrinsically provides all of these things, and it provides regulation exactly where its needed and to the exact degree thats needed.

you all think that in the absence of government all that will be left is a bunch of greedy monopolies who are hiring slaves to fill their factories and churning out dangerous products which kill the consumer. thats just nonsense. do you know how many lives the FDA has cost? look it up for yourself. pick a regulation agency, look up its history and see just how much it has retarded growth and innovation, see how much it has raised prices and decreased quality, look it up for yourself.

natural selection works in a free market just like it does in evolution. who here believes in evolution, and who here believes jesus in the stars making sure wolves don't eat too many sheep, and that the sheep have enough grass to eat? if something as complex as life can be "regulated" without a government official--what makes you think an economic system can't?

the free market provides incentives and penalties to grow the supply of products in demand and retard the supply of products not in demand. prices are set by supply and demand, pure and simple. prices set to high or two low crash the market. this is what happened in the housing bubble--prices were set to high because some government official (the federal reserve) was arrogant enough to think he knew the best price. government officials don't set prices to what they should be, they set prices to what is the most favorable, and "number of homeowners" is a favorable statistic for getting reelected. this creates pressure on the federal reserve to artificially set prices which raises this statistic.

when nobody interferes, prices are set by the sum actions of hundreds of millions of people, dynamically, on a day-to-day basis. the alternative you all are calling for, is to give this power to single man. even if he was benevolent (which he surely inst, as he is motivated by self interest just like anyone else) how could he possibly analyze the data?

companies who supply dangerous products will go out of business. companies like enron who lie to their stockholders will be charged with fraud and sent to jail. prices of products which are in high demand (clean energy, food, medical care) will spur growth in those markets, creating a wide array of competitive pricing and choices for the consumer. prices of products which are no longer in demand will drop, and those industries will adapt by making production more cost effective or go out of business, paving the way for newer, better industries.