This from Alan Greenspan, whose Ayn-Rand-influenced, anti-regulatory, easy money policies at the Fed were a primary cause of the current financial crisis. He of course, takes no blame for any of it. Life is so simple when you are an extremist ideologue and convinced of your inerrancy.

Yes, I’m blogging a lot about this. But the multiple collapses of major financial institutions is not business as usual, and will impact all of us. Banks will close. Loans will be even harder to get. Companies will have layoffs or go under. Pension funds will take big hits, municipalities too, as they park money is supposedly safe investments too. Hey, Fannie and Freddie used to be considered the safest of the safe for investing your money. Now their stocks go for less than $1.

Unlike other businesses, financial institutions do enormous amounts of trades and agreements with each other. That’s what has people scared. The counter-party risk. If Lehman goes down, those trades no longer have anything backing them on the Lehman side. I believe that Merrill, who is also wobbling badly, has $4 trillion in such trades. Yes, trillion.

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Barron’s reviews “Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank.”

Greenspan, who left the Fed in 2006 but is still consulted as a genius, might find a metallic exoskeleton exceptionally comforting come May, when the University of Texas Press publishes an unflattering book by Robert Auerbach entitled Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank.

Auerbach, a veteran Fed basher, portrays Greenspan as a real-life Professor Marvel — who, through double-talk or “garblement,” transformed himself into a mighty economic wizard à la Oz. Auerbach strongly implies that Greenspan’s 1977 Ph.D. from New York University was obtained in a few months with little more rigor than a matchbook-cover art degree and that Greenspan has kept his Ph.D. thesis secret in order to protect his vaunted academic reputation

Auerbach contends in his book that Greenspan’s invisible Ph.D. thesis is symbolic of a career marked by prevarication, cover-ups and a general aversion to making the Fed more publicly accountable.

I’ve never understood why Greenspan was held in such high regard, and always saw him as a garble-talking weasel who deliberately concealed his extremely reactionary political and financial agendas. Happily, the financial world is belatedly realizing he was a charlatan.

PS You knew Greenspan was an early acolyte of Ayn “Greed is Good” Rand, right?

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From LongorShortCapital, the de-saintifying of Alan Greenspan continues, as well it should.

1. Become Fed Chairman
2. Lower interest rates until you create an asset bubble. Hold them low until stagflation is in the air and a real estate bubble is floating
3. Stop being Fed Chairman and release a book on how you didn’t do anything wrong and have no regrets. If possible, time it perfectly with the worst real estate market in generations
4. Join the hedge fund which has profited more in % and dollar terms than anyone else has from your mess (which you didn’t create)
5. Build a platinum statue of your muse, Ayn Rand, and sleep with it every night

It also helps if you are mostly unethical.

But wait, there’s more.

Bernanke: Fed must avoid Greenspan errors

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