Greenspan Speaks about the Fed as Monetary Central Planner
Here is an incredible interview with Greenspan, from a couple of days ago. John Stewart asks Greenspan how we can pretend to have a free market if we have an elite board managing all the nation's money. Greenspan admits that it is a form of regulation, and further says that when we were on a gold standard, we didn't need a monetary manager.
Greenspan goes further to talk about the role of the Fed in gaming the system, attempting to outwit expections. He seems to attribute the business cycle to flights of fancy, while forgetting the role of the central planner, which he regards as purely benevolent. However, he wisely points out that economic forecasting is essentially impossible. He has been at the forecasting game for 50 years, and is no better at it today than he ever was, and he is no better than anyone else, he says.
Comments (18)
Ryan Kerschman
Well here we have hypocritcal Greenspan openly admitting that the Fed is a regulator similar to any other form of state regulation of an idustry. In the past, while Fed Chairman, he has advocated the free market, yet for some reason has no qualms about regulation of the money supply and interest rates.
I believe Greenspan just goes with the flow. I don't think he really believes that the Fed serves the public interest, but rather than try and fight what he views as an impossible battle, he just rides along and reaps the personal benefit.
Power does something to a person.
Ryan K.
Published: September 20, 2007 9:45 AM
JIMB
He's worse than "everyone else" at forecasting. He's been setting up the train wreck we're going into now for some time. Unfortunately, his predecessor Ben just pushed the self-destruct button.
Published: September 20, 2007 10:06 AM
Arend
Greenspans most striking comment I say would be "we can't improve ourselves". We can't? We don't? Are you blind?
The fundamental intellectual error underneath it is of course not that human behaviour is uncertain, it is exactly that human behaviour is uncertain given the fact that the reality humans are confronted with is uncertain.
Published: September 20, 2007 10:14 AM
Anthony
I honestly don't understand how someone with Greenspan's knowledge could have such a horrific track record; perhaps it's plain hypocrisy?
Published: September 20, 2007 10:30 AM
flix
Please, please!
Somebody pick up on his "in the '30s everybody thought that the gold standard was strangling the economy" and show the evidence!
Notice he doesn't state it as a fact, but rather says "everybody thought".
Does nobody remember that the Fed's excuse for existing at all was that it would cure the business cycle? No more depressions or panics since 1913, right?
Published: September 20, 2007 11:13 AM
Edward
Right at the end, Greenspan admits that forecasting/predicting the economy is virtually impossible. It would have been great if at that point John asked;
'So then why do we have a centrally planned money supply which cannot predict the market, instead of simply allowing the market to determine itself? And wouldn't that solve the problem of the damaging disparity between "expectation" and what the Fed actually does?"
I like John Stewart, but seriously, these were obvious follow up questions.
Published: September 20, 2007 11:44 AM
doug
It was quite a surprising interview to me. I was wondering who came up with the questions to ask Big Al since they were more penetrating than anything any "real" reporter (or congressional staffer) ever came up with. I used to joke that the Daily Show had more real reporting than the "real" news but it's not even funny any more.
Published: September 20, 2007 12:28 PM
Freewheelin'
It's actually a shame in a way. You know John probably wants to be even more pressing, but he has a tough line to walk. He understands its not a 'real' reporting show and must maintain his audience and keep things light. Still, even in these conditions he is able to challenge most of his guests more than in other interviews. Instead of recognizing this, many of his critics use it as why not to take him seriously.
Published: September 20, 2007 1:21 PM
Brian Gladish
Doug,
My thought exactly! I watched Leslie Stahl (CBS) and Maria Bartiromo (CNBC) interview Greenspan for far longer without extracting a single fact that would be of interest beyond People magazine (they seemed pretty focused on his habit of thinking and writing in the bath tub). Stewart starts off with a bang before moving in what I would consider a more socialist direction (suggesting that work is undervalued rather than that manipulating the interest rate impacts savings rates), but it really does demonstrate the complete acceptance and adoration of the Greenspan Fed in the "mainstream" media.
Thanks, Jeffrey, for posting this tidbit that I would otherwise never have seen!
Published: September 20, 2007 2:55 PM
Abel
Didn't Greenspan pretty much admit the Fed was propping up the stock market at the expense of anyone who actually put money into savings?
Published: September 20, 2007 3:08 PM
G
This is a great interview, the Daily Show commonly surprises (even if it is liberal-leaning, but then its hard not to be with the current administration).
Anything which makes the public realize how far we've gone from capitalism is a Good Thing.
Published: September 20, 2007 3:32 PM
Black Bloke
As I wrote to Lew Rockwell last night at 7:09 Eastern:
"Near the end of that video I was convinced I was about to hear the Keynesian phrase "animal spirits" come out of Greenspan's mouth. It seems he was trying, very subtly, to lead the conversation away from any possible condemnation of the central banking system, specifically to take himself out of the logical loop that one would encounter when investigating the business cycle. Age and craftiness, eh?"
And as usual he replied:
"Yes!"
Published: September 20, 2007 4:31 PM
One step at a time.
All of you who want Greenspan to answer the tough questions need to realize that this will take a while. The media's vision for the world is War Mongers who hate the poor vs Less War Mongering who love the poor. (The reality is the political class hates the poor the most as they provide them the least amount of plunder.) The Federal Reserve is the ultimate hammer to keep this vision alive as they are the only ones who can steal from the poor and middle class without the poor and middle class realizing it.
So the political class and the media will fight vigorously to keep up the reputation of this criminal and evil institution to continue their world vision.
I was amazed that John Stewart actually asked what the Fed does and more interestingly why it was created. The media never asks these things hoping to keep this little secret buried.
Published: September 20, 2007 5:14 PM
Mike
Oh how I wish Jon Stewart would let Walter Block walk out in his stead to interview one of these fools.
Published: September 20, 2007 9:15 PM
Anthony
Or better yet, Dr Hoppe. :)
Published: September 20, 2007 9:38 PM
olmedo
Stewart is a libertarian and he openly supports Ron Paul(watch his interview in the daily show).
the guy clearly understand asutrian economics.
the question about the working people is clearly an understanding (correct i will add) that financial inflation is a tranfer from the productive salary men to the rich capital ownwners. i am a libertarian and i completly agree with this.
olmedo
Published: September 21, 2007 11:43 AM
John Delano
I don't think Stewart really openly supports any candidate right now.
I saw Ron Paul in Chicago on Saturday (22 September) and asked if he saw this video. He said he saw it.
Published: September 24, 2007 2:37 AM
JackNYC
we can't 'forecast' fear or euphoria?
Where was he on, and after 9/11? (Where was he during the entire Cold War?)
Has he never considered the purpose of television and other entertainment media?
The prevalence of legal and illegal drugs?
The P.R. industry?
What a silly man
Published: September 26, 2007 12:06 PM