Greenspan is making a fool of himself again

Alan Greenspan is embarrassing himself again (or if not, he should be):

 "[Easy money] had absolutely nothing to do with the housing bubble," he says. "That's ridiculous."


[One of my cartoons from April of 2006–click on image for larger version.]

Greenspan continues to defend himself, unwilling to believe he could possibly have been responsible in any measure for the troubles we have all undergone over the past decade.

Here's another blooper:

"… [N]ot a single major forecaster of note or institution caught [the financial crisis]," he says. "The Federal Reserve has got the most elaborate econometric model, which incorporates all the newfangled models of how the world works—and it missed it completely."

Well, even stupid little me caught it, Mr. Greenspan, simply by reading people who make common sense.  See my proof above, in April of 2006, and here, even earlier in February 2006.

What planet does this guy live on?

Read more of his latest mutterings here in this weekend's Wall Street Journal.

Had Enough Congressional Bickering Yet?

If you are like me, you've about had it with the bickering in Washington about the fiscal cliff. In fact, even the words "fiscal cliff" are starting to wear me thin.

Well, we are not alone. Take a look here. This is the Capitol Building in Washington, D.C. (You can click on the photo for a larger image.)


[Thanks to Wikipedia Commons for the photo.]

You may not be able to see what's on top of the dome. Up there is a statue of Lady Freedom. Take a look:



Let's get an even closer look:

(Click on the image for a larger view.)



I guess we'll have to try to persuade her not to get too far away.

The PPIP Drip

Another version of my April 4th cartoon, suggested by a friend. Which one do you prefer? (Click on the image for a larger version.)

PPIP: The Right Medicine?

These tense times need comic relief. (Click on the image for a larger version.)

Future Inflation: Taking Lessons From Those Who Know

When I think of the potential for future inflation from the combined current actions of the Treasury and Federal Reserve, I need a little comic relief.



[Click on the image for a larger version.]

Reality Check: The Government Stimulus and Bail-Out Plan

Today is a cartoon about the government stimulus and bail-out packages. I think it's self-explanatory. (Click on the image for a larger version.)

Seeing the Humor in Obama's Bold New Economic Recovery Plan

Couldn't resist this one after reading about Obama's bold new economic plan.


[Click on the photo for a larger version.]

The Ghost of Times Past. The New Deal all over again. I guess we never learn.

In other news today, I read some interesting figures in an article by Martin D. Weiss, Ph.D. Although I'm not sure I can agree with his advice (he says we should all sell everything and buy Treasuries, keeping the faith that the dollar will maintain its credibility through this crisis), he points out this:

"By mid-year 2008, there were $52 trillion in interest-bearing debts in the United States, including mortgage loans, credit cards, corporate debt, municipal debt and federal debt; the federal government needed about $50 trillion for Social Security, Medicare and other commitments kicking in at a quickening pace; and U.S. commercial banks held another $182.1 trillion in side bets called “derivatives.” Grand total in the U.S. alone: $282 trillion. The numbers are not directly comparable, but just to give you a sense of the magnitude of the problem, that’s 402 times more than the $700 billion bailout package."

These are some pretty astounding figures.

(There's another fellow, Michael Hodges, who gives some great charts and data and whose horn I have been tooting for years now. See his wonderfully informative website.)

The rest of Weiss's article makes a lot of sense and even seems to point to the fact that the dollar is in great danger. But then he gives his recommendations to remain in dollar-denominated instruments.

If there is danger of a flight from the dollar and other paper currencies, as he warns Congress, isn't gold the only thing left?

For more about his warning, read the white paper he submitted to Congress on 9/25/08 (corrected 10/1/08) and other papers he links to therein.

More Greenspan Gobbledegook

This man is a great disappointment to me. Several decades ago, he was one of the few economists who made good economic sense, defending the gold standard and decrying excessive money and credit creation through centralized government monetary intervention.

Then he changed. During his tenure as Chairman of the Federal Reserve prior to Dr. Bernanke, he mastered what became known as "Fed-speak," muddled punctual declarations specifically intended to confuse, presumably to cover up the interventionist Fed's real intentions.


[Click on the image for a larger version.]

(For a couple more cartoons on the subject, see this one and this one.)

After all those years of blatant disregard of his own prior wisdom, he is now busy trying to defend his record, as we can read and hear in this latest interview in the Wall Street Journal.

Here's an example of his relatively new-found illogic as expressed through Greg Ip's paraphrasing:

"At the time [during his tenure], Mr. Greenspan expected his [low interest rate] policy to boost housing because the rest of the economy was relatively unresponsive to lower interest rates. Based on decades of his own research, he believed a buoyant housing market would spur consumers to borrow against home values and spend more. This would not produce a housing bubble, he predicted, because it was difficult to speculate in homes and the memory of the 2000 tech-stock bust remained fresh. [Italics added]

I would love to see some serious economists "have at" the former Chairman's specific research that gave rise to this second prediction. Since when is it difficult to speculate in homes? Real estate speculation has been part of the economic landscape both in good times and bad, and long before governments learned to inflate their currencies--and believe me, that was many, many centuries ago.

Here's the next paragraph:

"Mr. Greenspan now admits he was wrong about the improbability of a housing bubble. Yet he has long maintained that bubbles are an unavoidable feature of a dynamic economy. He pulls out a 1999 speech and shows, underlined in green marker, passages in which he warned of recurring but unpredictable patterns of overconfidence followed by investor panic. He does not share some foreign central bankers' belief that their job is to defend against excessive asset-price inflation: No sensible policy, he maintains, could have prevented the housing bubble."

I guess that means that if perchance his results don't tally with his expectations, then it must be the fault of some underlying economic axiom we could call the "Bubble Unavoidability Theory." Funny, I never heard of that one, and just because it's Greenspan who formulated it out of the blue does not a valid theory make.

Mr. Greenspan, if I were you, I'd get out a little of that humility syrup that you were taking back in the 1960s. And while you're at it, pull out and reread your old writings, put your thinking cap back on, and hie thee back to the research drawing table.

Arnold's Broken Promise

On October 8, 2003, California's voters elected Arnold Schwarzenegger as Governor of California to straighten out the State's budget crisis. Back then, he said this:

"Today California has given me the greatest gift of all: You've given me your trust by voting for me. I will do everything I can to live up to that trust. I will not fail you."

Famous last words.

In one of the most flagrant flip-flops of all time, he has now joined Fabio Nunez and the other spendthrift democrats in driving California further than ever into debt. (Click on the image for a larger version of my cartoon.)

A Bit of Humor about the Stimulus Package

Sometimes I manage to laugh at government's attempts to be useful. Here's my latest cartoon. (Click on the image for a larger version.)

Comic Relief: When Tears Won't Come, Try Laughing

This idea from my friend Charlie, about the government's efforts to cure our banking problems, gives me a chance to practice my cartooning skills once again. (Click on the image for a larger version.)



I guess the government and Fed just don't get it, i.e. that the origin of this mess is the very tool they're using to cure it.

In my previous two posts you'll see that I'm not alone in this opinion.

Meeting Between Greenspan and Bernanke

Cartoon time. What do suppose they talk about? (Click on the image for a larger version.)



Thanks to my friend Charlie Murray of AIER for this idea.

The Credit Vultures - a Cartoon

I'm still in my cartooning phase. Here's a birds eye view of the credit situation. The courts are now getting involved.

Click on the image for a larger version.

Greenspan from the Sidelines - Cartoon Time

Today I felt like getting back to my cartooning. I've been reading the various interviews with Greenspan, our former Federal Reserve Chairman, and he advises his successor Ben Bernanke to avoid exacerbating inflation by lowering Fed rates too much--strange advice considering from whom it comes.



[Click on it for a larger version.]

Paulson Cartoon

Here's my Paulson cartoon. See my last post for the reference.

(Click on it for a larger version.)

Comic Relief - Bush's Last Stand

Things are really getting intense, so to relieve the pressure I drew this cartoon to illustrate my previous post.

(Click on the image for a larger version.)



Bush's Last Stand

More Nonsense from the GW Community

You won't believe this latest, about the moose. Here's an article from a German publication called Spiegel.de, which claims that "the poor old Scandinavian moose is now being blamed for climate change". Did you know that a moose produces 4,620 pounds of CO2 in a year? I sure didn't. This is claimed to be the equivalent of that produced by a car after an 8,000 mile journey.

You know, I guess this really needs no further comment. So I've done a drawing that I hope you will enjoy.