Greenspan nod a major Bush blunder: Snatching defeat from the jaws of stalemate

Photo of author
Written By Robert Sentry

Riding high from military victory in Iraq, George Bush was sinking low last week as he gave the Fed Chairman an undeserving bonus—another term in the driver’s seat in the demolition derby Greenspan has driven us into. Even though Greenspan conducted a bubble in the late 90s and orchestrated a crash of historic proportions, George Bush bequeathed a bonus to this bonehead instead of booting him to Beantown.

In order to cope with this outrageous gift presented to the destructor of dreams and retirements of millions of American investors, let’s first take a brief look at the precursor to this unexplainable blunder by George Bush.

If the name Mary Ryan is not at your top of mind awareness her actions certainly are. Ms. Ryan headed up the State Department’s consular office that let in most of the 911 hijackers and she personally oversaw the incomplete paperwork and lack of background checks on these terrorists. She also sent out the visa acceptance to the flight schools of a couple of the hijackers, six months after they were dead.

No, she did not get fired, she received a $15,000 bonus seven months after 911.

Then there is Spike Bowman, FBI deputy general counsel, who supervised the unit that denied a pre-Sept. 11 search warrant against Zacarias Moussaoui. Bowman won a presidential citation and large cash bonus.

The pattern is becoming all too familiar in the government gravy train parade and, unfortunately within the Bush advisor camp—status quo. George Bush seems to have been shooting for the trifecta with the “Bonus for Boneheads Award” as his choice in Alan Greenspan is quite bewildering.

Greenspan has been a critic of Bush’s beloved elimination of the double taxation on dividends. Also, in the same week that Bush aggressively pressured Ohio’s Senator George Voinovich (R) to support his tax cut, he offered another term to Greenspan who had been lobbying Senators to vote against Bush’s tax cut proposal.

Contrary to the business shows’ brainwashing of viewers with the Greenspan is a guru routine, Alan Greenspan has infringed on the free enterprise system with unnecessary interest manipulations, launched a frontal attack on the free market system through stock price bashing, and tightened interest rates even though inflation was not present in the system.

The miserable failures of Alan Greenspan cannot be understated. There are three primary goals of the Federal Reserve system:

  • oversee the payment and settlement system

  • maintain stability in the financial system

  • conduct monetary policy and pursue maximum employment

Greenspan gets an OK for an efficient payment and settlement system, but brace yourself for a few grizzly details on the other two.

Does this look like “stability in the financial system”?

Alan Greenspan’s quick finger on the interest rate trigger along with being dazed and confused on how to handle the Y2K scenario led to a market crash in the NASDAQ as severe as the crash during the Great Depression. What you see here is a drop from over 5000 to under 1500 from March 10, 2000 (the peak) to March 10, 2003, a drop of over 70%. For many industries, it was worse. The word crash is a gross understatement. That may rate a bonus from Bush, but it will cast Greenspan in the history books as presiding over the biggest destruction of personal wealth in the history of the United States.

Another primary goal of the Fed is to conduct monetary policy and pursue maximum employment. When George Bush entered office in January of 2001, the number of unemployed was 5.9 million. The latest April 2003 stats show the unemployed total 8.4 million—good job, guru.

Greenspan’s responsibility to “conduct monetary policy” was more than a dismal failure. By raising the federal funds rate from 5.00% to 6.50% from June 30, 1999 to May 16, 2000, in the face of a pending economic slowdown and a post-Y2K capital spending cut, Greenspan was the main cause for wealth destruction that has totaled over eight trillion dollars.

Market Value NASDAQIndex Peak March 10, 20006.711 Trillion Dollars
Market Value NASDAQApril 9, 20031.990 Trillion Dollars
Total Loss NASDAQPeak to current loss total . . .4.721 Trillion Dollars
Market Value NYSEIndex Peak August 200012.880 Trillion Dollars
Market Value NYSEMarch, 20039.194 Trillion Dollars
Total Loss NYSEPeak to current loss total . . .3.686 Trillion Dollars
Total Market Value LossCombined Exchanges Total Loss . . .8.407 Trillion Dollars

To emphasize the wealth destruction Greenspan presided over, the total public debt of the United States, after all these years of accumulation, currently stands at 6.46 trillion dollars. This trashing of Americans’ retirement savings is two trillion dollars more than the entire public debt of the United States. Let’s make it personal and state that 8.407 trillion dollars equates to $41,000 for every American citizen 18 years old or over.

So there you have it, from working against Bush’s tax cut and dividend taxation elimination, to orchestrating the worst market crash since the Great Depression, to watching millions lose their jobs, and having millions of retirees see their life of savings disappear, George Bush wants to give another term to this trasher of treasures who will be nearly 80 years old when the new term expires.

After watching 18-19 year old youngsters conduct themselves so brilliantly in Iraq, couldn’t George Bush find an economist that has lived less than nearly a century?

What is it with George Bush that every time he scores a brilliant victory, he has the urge to follow it up with the most outrageous blunder? Is George Bush embarrassed so much by success that he feels the need to humble himself?

We just saw another example of George Bush snatching defeat from the jaws of the 2000 stalemate as another million or so 2004 voters who supported Bush in 2000 will consider turning their backs on him as Bush chalks up yet another moronic move domestically wiping out memories of an overwhelming victory overseas.

***

Total debt from Bureau of Public Debt. Population segment from Census Bureau. Market Data from official database of NASDAQ and the NYSE. Fed changes from Open Market Committe minutes. Chart from BigCharts.com.

Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”

Leave a Comment