An op-ed by Robert Samuelson in the Washington Post (and syndicated), entitled Robert J. Samuelson: The Greenspan paradox is a pretty fair assessment of Greenspan, but I’d like to take exception to some of it.
Greenspan’s critics have another story. “Deregulation,” championed by Greenspan, is their villain. Competent oversight could have curbed dangerous excesses. The reality is murkier. Many of the institutions that came to grief — banks, investment banks — were regulated. But regulators shared the optimistic consensus concerning the economy’s transformation. Complacency made regulation permissive.
This, to me, is talking out of both sides of one’s mouth and doesn’t say anything useful. Sorry, Robert. I was expecting something more astute.
Yes, the regulatory agencies still existed. Their regulation wasn’t “permissive”. It was next to non-existent. By design. Regulation was intentionally sabotaged, by the conservative leaners, especially (but not solely) during Republican administrations. Bush II especially put in regulators in many regulatory agencies who were particularly antipathetic to the very activities they were supposedly regulating. Thus the fox was guarding the hen house. The laisse faire-ist agency heads continually gave more and more room for the the risk-taking Wall Street bankers to play games with other people’s money. It was not “complacency” – it was by intent. Complacency implies that they were lazy and, well, these things just kind of happened. It was anything but that. Continue reading