Pay No Attention to That Man Behind the Curtain

The press is playing Toto, pulling back the curtain in a re-examination of Alan Greenspan. The former Federal Reserve chairman for more than a decade was the nation's leading proponent of letting market forces run free. "Now, the nation is confronting the consequences," according to the front-page article in Thursday's New York Times. Turns out Greenspan wasn't much of a wizard after all. There were a few who doubted Greenspan even in his heyday. At a congressional hearing in 2000 on the mer

The press is playing Toto, pulling back the curtain in a re-examination of Alan Greenspan. The former Federal Reserve chairman for more than a decade was the nation's leading proponent of letting market forces run free. "Now, the nation is confronting the consequences," according to the front-page article in Thursday's New York Times. Turns out Greenspan wasn't much of a wizard after all. There were a few who doubted Greenspan even in his heyday. At a congressional hearing in 2000 on the merger boom, then-Representative Bernie Sanders asked: "Aren't you concerned with such a growing concentration of wealth that if one of these huge institutions fails that it will have a horrendous impact on the national and global economy?" "No," Greenspan replied. "I'm not."

"What amazed me was the kind of overblown respect, not only Republicans had for Greenspan, but Democrats as well. They rolled out the red carpet for him," Sanders recently recalled.

The Brattleboro Reformer dusted off an even older transcript for an editorial about the debate in Congress 10 years ago over whether to eliminate the Glass-Steagall Act of 1933, which put up firewalls to keep commercial banks from owning investment banks and vice versa. Sanders, then a congressman, warned that the Gramm-Leach-Bliley Act "will do more harm than good" and lead to fewer banks and financial service providers, result in increased fees, diminish credit for consumers and small businesses and increase taxpayer exposure in the event financial institutions fail. "He was a voice in the wilderness then, and the Gramm-Leach-Bliley bill passed in 1999 with wide bipartisan support. Sure enough, everything Sanders predicted came to pass -- and then some," according to the editorial.

To read the Times article, click here.

To read the Reformer editorial, click here.