The author of Predator Nation, Charles Ferguson has been critical of Alan Greenspan, who seemed to have a penchant for bailing out the financial markets by lowering interest rates during his years as chairman of the Fed. He did this multiple times; after the stock market crash of 1987, after the Savings and Loan crisis of 1987-95, after the first gulf war of 1990-91, after the Mexican crisis 1994, after the Asian crisis in 1997, after the LTCM bankruptcy, after the internet bubble in 2000 and after 9-11 2001.
His leaning to increase money supply to prop up the markets came to be called the Greenspan Put.
Essentially, he was being generous to one set of people as long as someone else was going to bear the burden of the loss.
I happened to take a break from reading Predator Nation by Charles Ferguson to watch a sit-com on TV. The parallel between the two Alans were hard to miss, for the Alan on the sit-com, also had a habit of being generous to a certain set of people with money that belonged to his mother or his brother. Cosmo Kramer comes to mind too.
Moral Hazards, it appears, are more common than a certain Alan would have us believe.
1 comment:
Another book that would prove worthy is 'The Alchemists' by Neil Irwin. As for Alans, the one that truly mesmerises is Alan Shore of Boston Legal - because sometimes good people have to do bad things to make the bad guys pay.
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