Not Saint Greenspan!

Well this is long overdue. And reported on Mrs. Greenspan Andrea Mitchell's network, too, although it's from their content agreement with the Washington Post:

Perhaps the Maestro composed some discordant notes after all.

The record of longtime Federal Reserve chairman Alan Greenspan -- worshipped by business leaders and dubbed "Maestro" in a 2000 biography by The Post's Bob Woodward -- is getting a critical look as his successor Ben S. Bernanke wrestles with problems that began on the Maestro's watch.

Many economists blame Greenspan for lax bank supervision and for keeping interest rates too low, too long from mid-2003 to mid-2004. That, the theory goes, fueled the housing bubble and spawned subprime and adjustable-rate mortgages for low-income people, vast numbers of whom can't make their payments now. Banks bought those mortgages in bundles that are worth far less than they originally were. That has led to big write-offs, shaking the entire financial system.

In an interview yesterday, Greenspan said the Fed wasn't to blame. He said that global forces beyond the control of the Federal Reserve had kept long-term interest rates low, fueling the housing bubble earlier this decade. "Those who argue that you can incrementally increase interest rates to defuse bubbles ought to try it some time," he said. "I don't know of a single example of when interest rate policy has been successful in suppressing gains in asset prices."

Oh hahahahaha. Yeah, I guess cheerleading for adjustable rate mortgages and telling everybody to go buy them up in 2004 didn't affect national attitudes. Must have been those "global forces" like US investment banks coming up with elaborate pyramid schemes to turn crap mortgages into billions in an era of lax oversight. Yeah, the Fed is TOTALLY blameless.

And now we're seeing this "global" economic meltdown hit locally.

In Seattle, sales at a long-established hardware store, Pacific Supply, are suddenly dipping. In Oklahoma City, couples planning their weddings are demonstrating uncustomary thrift, forgoing Dungeness crab and special linens. And in many cities, the registers at department stores like Nordstrom on the higher end and J. C. Penney in the middle are ringing less often.

With Wall Street caught in a credit crisis that has captured headlines, the forces assailing the economy are now spreading beyond areas hit hardest by the boom-turned-bust in real estate like California, Florida and Nevada. Now, the downturn is seeping into new parts of the country, to communities that seemed insulated only months ago.

Congratulations, "Maestro," this is your legacy. A possible depression. It'll be a little solace watching you squirm for the rest of this downturn.