# Greenspan pulls a Powell. **URL:** \ **Category:** Great Debates\ **Created:** [September 15, 2007, 11:04am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300 "2007-09-15T11:04:35Z")\ **Posts on this page:** 19\ **Page:** 2
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [September 16, 2007, 8:20pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/21 "2007-09-16T20:20:13Z")
[QUOTE=John Mace] The sub-prime mortgage problems are a facet of the globalization of the mortgage industry. [/quote] Can you explain that? Honestly, it’s not clear to me. How has the mortgage industry been “globalized”? And how are sub-prime mortgages linked to that? > [@](#): > > The sub-prime issue is a blip on the radar, from a macro-economic viewpoint. From a wide enough macro-economic viewpoint, isn’t just about anything a blip on the radar? (No snark intended, in case it reads that way.) If the sub-prime issues have a ripple affect on other aspects of the U.S. economy, how is that a macro-economic blip? And, more confusingly (to me), if the sub-prime issue is an aspect of globalization of the mortgage industry, how can it possibly not be a macro-economic issue? ---
**Author:** ![David\_Simmons](https://avatars.discourse-cdn.com/v4/letter/d/9de053/32.png) [@David\_Simmons](https://boards.straightdope.com/u/David_Simmons)\ **Post date:** [September 17, 2007, 12:09am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/22 "2007-09-17T00:09:17Z")
[QUOTE=Der Trihs] Plenty, yes, but he could have done even worse. [/QUOTE] you mean like dissolving Congress and the courts? Of course, the Republican congress gave GW all he asked and the Democrats in Congress haven’t done much better. The courts? Time after time the courts have ducked the issue of whether or not national security is really at issue. Governmental leaders seem paralyzed by their fear of the fear in the public that someone might just possibly be injured or killed in a terrorist attack. Time after time windy orators speak of the sacrifices by “our veterans” in defending our freedoms and then proceed to defend infringing on those freedoms through fear and panic,. ---
**Author:** ![tomndebb](https://avatars.discourse-cdn.com/v4/letter/t/b9e5f3/32.png) [@tomndebb](https://boards.straightdope.com/u/tomndebb)\ **Post date:** [September 17, 2007, 12:41am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/23 "2007-09-17T00:41:59Z")
[QUOTE=Digital Stimulus] Can you explain that? Honestly, it’s not clear to me. How has the mortgage industry been “globalized”? And how are sub-prime mortgages linked to that? [/QUOTE] Here is one article discussing [global effects of sub-prime crisis](http://www.thehindubusinessline.com/mentor/2007/08/27/stories/2007082750291300.htm). ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [September 17, 2007, 1:26am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/24 "2007-09-17T01:26:53Z")
[QUOTE=John Mace] Your first cite still projects a surplus, though, and I can’t really figure out what the second cite says other than that there is a high degree of uncertainty in projecting budgets. You don’t say!! [/QUOTE] Actually, they predict that the surplus would be smaller than the Bush tax cuts costs so the tax cuts would throw us in to deficit, albeit a small one. And, they also warn that things could turn out a lot worse if the rosy economic projections aren’t right. Their crystal balls may not have been perfect…but they were a hell of a lot better than Greenspan’s. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 17, 2007, 1:59am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/25 "2007-09-17T01:59:32Z")
[QUOTE=jshore] Actually, they predict that the surplus would be smaller than the Bush tax cuts costs so the tax cuts would throw us in to deficit, albeit a small one. And, they also warn that things could turn out a lot worse if the rosy economic projections aren’t right. Their crystal balls may not have been perfect…but they were a hell of a lot better than Greenspan’s. [/QUOTE] It’s not clear to me that that is what they predicted. Their numbers, for instance, assume that the tax code would be modified (and revenues negatively impacted) to address the AMT creeping down into the middle class. This, AFAIK, has not happened. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 17, 2007, 2:07am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/26 "2007-09-17T02:07:20Z")
[QUOTE=Der Trihs] We have both. We spend too much on useless things, and we are unwilling to pay for it. [/quote] That says a lot about “us”, but I don’t know what it says about how best to fix the budget problems. > [@](#): > > The simple fact that you don’t have half or more of the schools in this country teaching creation shows that it’s working. Hah! By that logic, my taking a shit every day since Bush took office is the reason we don’t have half the schools in this country teaching creationism. It’s clear that you are simply making assertions with no basis in fact. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [September 17, 2007, 2:44am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/27 "2007-09-17T02:44:03Z")
[QUOTE=John Mace] …my taking a shit every day since Bush took office is … [/QUOTE] Cite? ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [September 17, 2007, 8:18am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/28 "2007-09-17T08:18:44Z")
[QUOTE=tomndebb] Here is one article discussing [global effects of sub-prime crisis](http://www.thehindubusinessline.com/mentor/2007/08/27/stories/2007082750291300.htm). [/QUOTE] Thanks, **tomndebb** , but that didn’t do it for me. Perhaps I misunderstood the original statement; upon re-reading my post, I realize I didn’t spell out my question very well. I certainly understand how the _effects_ of the sub-prime mortgage market are global (decades ago, I worked for a company that did due diligence on mortgage portfolios for investment banks, e.g., those auctioned off by the RTC). But that’s not what **John Mace** (literally) said. At least the way I read it, the cause/effect was reversed. That is, I read it as: “the mortgage industry has been globalized. The problems with sub-prime mortgages _resulted_ from that globalization.” The way I see it, the mortgage industry itself – that is, the transactions made between lenders and borrowers – hasn’t been globalized; mortgages are always (relatively) local. That they then get put into portfolios for trading is unrelated to the root problems with sub-primes; those problems started with the originating lenders (overlooking loan to income ratios, incomplete disclosure, fraud, etc.). Again, if I misunderstood the statement’s intent, I’m OK with that. Furthermore, I’m pretty sure I agree with (most of) **John Mace** ’s defense of Greenspan. But is it clear why I asked for clarification? ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [September 17, 2007, 8:30am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/29 "2007-09-17T08:30:19Z")
No one picked up on his comments on oil and the Iraq misadventure? > [@](#): > > Sounding more like an activist than a lifelong Republican who worked alongside six US presidents, Mr Greenspan, the former Federal Reserve chairman, said in an interview with the Guardian that the invasion of Iraq was aimed at protecting Middle East oil reserves: “I thought the issue of weapons of mass destruction as the excuse was utterly beside the point.” > > \ > > In the book Mr Greenspan writes: “Whatever their publicised angst over Saddam Hussain’s ‘weapons of mass destruction’, American and British authorities were also concerned about violence in the area that harbours a resource indispensable for the functioning of the world economy. I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” [Iraq invasion driven by oil](http://www.guardian.co.uk/usa/story/0,,2170661,00.html) ---
**Author:** ![zamboniracer](https://avatars.discourse-cdn.com/v4/letter/z/e9a140/32.png) [@zamboniracer](https://boards.straightdope.com/u/zamboniracer)\ **Post date:** [September 17, 2007, 2:28pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/30 "2007-09-17T14:28:32Z")
[QUOTE=China Guy] \ Greenspan was famous in the financial markets for the exactness of his words, and clearly 100% cognizant of how his speeches could move markets around the world. \ [/QUOTE] I thought Greenspan was famous for being opaque and delphic in his words. ---
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [September 18, 2007, 9:05am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/31 "2007-09-18T09:05:17Z")
[QUOTE=John Mace] So, you’re sure that had Greenspan followed some other policies that we wouldn’t have had other, more serious problems? The sub-prime mortgage problems are a facet of the globalization of the mortgage industry. In the long wrong, that’s probably a good thing, even if it does have some deleterious side effects. As I said in my first post, the Fed has basically one lever to pull out of which 1,000s of possibilities can ensue. What might be good for the overall economy can very well be bad for any given sector. Can we get a cite for how “screwed” the US economy is going to be for the next 1 to decades? The sub-prime issue is a blip on the radar, from a macro-economic viewpoint. [/QUOTE] For how screwed, Greenspan had some harsh words in his book. I can’t find the article on line. But it doesn’t take a rocket scientists to look at the level of individual and government debt and government deficit spending to realize the US is living beyond it’s means. The sub-prime mortgage root issue is bankers not performing proper due diligence on home buyers, and not requiring a prudent mortgage (say 20% downpayment?). The globalization kicks in when such loans are sold on, bundled up, and then sold to investors around the world. All sub prime mortgage debt is just a new name for Junk Bonds. Sub Prime bonds can not exist without the underlying sub-prime mortgage loans. A chicken and egg thing. I will grant that the sub-prime loan issue would be a small fraction of the current size if those loans were still held by the banks/institutions/shysters that made the original loans to the buyers. ---
**Author:** ![ambushed](https://avatars.discourse-cdn.com/v4/letter/a/3bc359/32.png) [@ambushed](https://boards.straightdope.com/u/ambushed)\ **Post date:** [September 18, 2007, 9:32am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/32 "2007-09-18T09:32:40Z")
[QUOTE=tagos] No one picked up on his comments on oil and the Iraq misadventure? [Iraq invasion driven by oil](http://www.guardian.co.uk/usa/story/0,,2170661,00.html) [/QUOTE] I’m surprised that this hasn’t come up here as well. I’m a lifelong liberal Democrat, but I never bought the line that oil was a primary factor in Bush’s decision to invade Iraq, insofar as I’m “dead certain” that he would have done the same thing if there hadn’t been much oil there. I mean, can’t you pretty much argue (sometimes more justifiably than others) that oil is a factor in _every_ U.S. foreign policy decision, making the issue in this case more or less moot (again, insofar as I’m sure Bush would have done it anyway)? I mean, even with the _particularly_ ugly recent revelations of Iraqi-unity-fucking sweetheart deals with Bush’s bud Hunt, does the “blood for oil” argument really stick? Or does my view that oil was just icing on the cake prevail? ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [September 18, 2007, 1:57pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/33 "2007-09-18T13:57:53Z")
Greenspan says he was misquoted on the oil thing, and in fact he supported the invasion of Iraq. [Bashing Bush with Greenspan](http://www.latimes.com/news/opinion/commentary/la-oe-goldberg18sep18,0,3784.column?coll=la-home-commentary) ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 18, 2007, 2:54pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/34 "2007-09-18T14:54:45Z")
[QUOTE=Sam Stone] Greenspan says he was misquoted on the oil thing, and in fact he supported the invasion of Iraq. [Bashing Bush with Greenspan](http://www.latimes.com/news/opinion/commentary/la-oe-goldberg18sep18,0,3784.column?coll=la-home-commentary) [/QUOTE] But that doesn’t mean it still wasn’t about oil. Look, I don’t think he is saying we went into Iraq so the US could steal all their oil. But we all know that both Gulf wars (especially the first one) would not have happened if there wasn’t oil (or some other strategic resource) involved. Just look at Africa and the various humanitarian crises that have occurred there in the last 30 years to see what motivates the US, and the rest of the world for that matter, to take military action. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [September 18, 2007, 4:35pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/35 "2007-09-18T16:35:11Z")
[http://www.washingtonmonthly.com/archives/individual/2007\_09/012080.php](http://www.washingtonmonthly.com/archives/individual/2007_09/012080.php) > [@](#): > > …“If Saddam Hussein had been head of Iraq and there was no oil under those sands,” Greenspan said, “our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day” passing through… Saddam was going to sieze control of the Straits of Hiormuz? With what navy? With what air force? He couldn’t even seize control of his own territory, how in the name of Bleeding Og was he going to control the Straits of Hormuz? ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [September 19, 2007, 1:20pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/36 "2007-09-19T13:20:08Z")
[QUOTE=elucidator] [http://www.washingtonmonthly.com/archives/individual/2007\_09/012080.php](http://www.washingtonmonthly.com/archives/individual/2007_09/012080.php) Saddam was going to sieze control of the Straits of Hiormuz? With what navy? With what air force? He couldn’t even seize control of his own territory, how in the name of Bleeding Og was he going to control the Straits of Hormuz? [/QUOTE] With his Balsawood Drones of Death if I recall. ---
**Author:** ![David\_Simmons](https://avatars.discourse-cdn.com/v4/letter/d/9de053/32.png) [@David\_Simmons](https://boards.straightdope.com/u/David_Simmons)\ **Post date:** [September 19, 2007, 3:24pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/37 "2007-09-19T15:24:52Z")
The “I was misquoted” line is almost funny. How can you misquote a written down line in a book that says that it is too bad that it is politically inconvenient to say that the Iraq is mostly about oil? When writing and during the editing process Greenspan had plenty of time to consider that statement and those accompanying it. How come he’s now trying to cover his ass with the “ins” by a verbal barrage of clarifications? ---
**Author:** ![Airman\_Doors\_USAF](https://avatars.discourse-cdn.com/v4/letter/a/e36b37/32.png) [@Airman\_Doors\_USAF](https://boards.straightdope.com/u/Airman_Doors_USAF)\ **Post date:** [September 19, 2007, 3:37pm UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/38 "2007-09-19T15:37:42Z")
If you’re interested, he appeared on _Fresh Air_ [yesterday](http://www.npr.org/templates/story/story.php?storyId=14500893). Terry Gross tried to take him to task and pretty much failed. You may not agree with his rationale on things, but bear in mind that he did work through several different administrations so he must have been doing something right. For my part, I think he generally did pretty well, but everybody makes mistakes whether they want to or not, and Alan Greenspan is no less affected by the Law of Unintended Consequences as anyone else. ---
**Author:** ![ambushed](https://avatars.discourse-cdn.com/v4/letter/a/3bc359/32.png) [@ambushed](https://boards.straightdope.com/u/ambushed)\ **Post date:** [September 20, 2007, 4:05am UTC](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300/39 "2007-09-20T04:05:05Z")
[QUOTE=David Simmons] The “I was misquoted” line is almost funny. How can you misquote a written down line in a book that says that it is too bad that it is politically inconvenient to say that the Iraq is mostly about oil? When writing and during the editing process Greenspan had plenty of time to consider that statement and those accompanying it. How come he’s now trying to cover his ass with the “ins” by a verbal barrage of clarifications? [/QUOTE] I agree entirely. His attempts at backpedaling are implausible, even silly. “No, I meant that the Iraq war was mostly about oil for _me_, not the Bush administration.” Well, that sure clears up things… [Previous page](https://boards.straightdope.com/t/greenspan-pulls-a-powell/419300.md?page=1)