Political Cortex: Brain Food for the Body Politic

There is no mistaking one fact, that during his long run as Federal Reserve Chairman, the stock market suffered a severe crash, causing investors to lose huge amounts of money.  

On "60 Minutes" Sunday, September 16, Greenspan claimed he had to lower the interest rate after that stock market fiasco to prevent a recession.

His method in the madness of avoiding what he then perceived as a recession was that by lowering interest rates to the lowest level in 40 years, who was he immediately helping?  Of course, exporters jumped with joy.  U.S. producers were given a great advantage by making our products cheaper than those of many other nations.  

Some nations cried "foul!"  Currency destruction is a last resort of a nation in deep trouble with a potential collapse.  With the British pound twice the value of the U.S. dollar and the Euro approximately 40 percent higher than the dollar, foreigners could buy corporations, residential property, hotels and vacations at fire sale prices.

The housing market boomed as interest rates plunged to a 40-year low.  Those owning houses or condos were suddenly rich with equity loans readily available.  Money flowed and prosperity had come to our economy, Bush boasted.

The laugh of Greenspan's pathetic interview was when he dared to say that inflation was a major concern.  How absurd for the man who has engineered the low interest rate that generated the biggest housing inflation bubble to express his concern about inflation.

30 percent of housing mortgage loans in California were interest only.  This was not generating a stable economy, Mr. Greenspan. The housing market bubble you created was doomed to disaster.  Now millions of homeowners face foreclosure.  

Some banks will negotiate changing 30 year loans to 40 or even 50 years.  If they lose their houses through foreclosure the debt remaining on their loans can be considered income.  This Bush wisely has been trying to change, recognizing the dire economic plight of the person losing his or her home.  

In his book Greenspan spoke bluntly on the Iraq War.  Greenspan wrote, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq War is largely about oil."

Ray McGovern, a former CIA analyst, cited Greenspan's admission in an article on the ConsortiumNews.com site.  He also stated his own view on the subject with blunt candor:

"There are so many still who `can't handle the truth' and that is understandable.  I have found it a wrenching experience to conclude that the America I love would deliberately launch what the Nuremberg Tribunal called the `supreme international crime' - a war of aggression - largely for oil."

Before rushing to bestow credit on Greenspan for candor concerning his statement that the Iraq War was "largely about oil," as someone classifiable as a loyal Republican who stated in his "60 Minutes" interview that he believed it was better to elect a GOP president in 2008, he immediately sought to wiggle out of what so many were labeling as an admission concerning the real cause of the Iraq War.

On the "Today" show the morning following his appearance on the "60 Minutes" interview with Leslie Stahl, Greenspan was already looking for wiggle room.  He pointed out that Saddam Hussein might well acquire nuclear weapons to use against America.  Greenspan further stated that Saddam Hussein threatened the entire oil supply of the Gulf region when he occupied Kuwait prior to the Gulf War of 1991.

This was a sadly feeble response, one that has been refuted many times.  America prompted the brutal Iraqi dictator that we had formerly openly supported to invade Kuwait through U.S. Ambassador to Iraq April Glaspie, who informed Saddam that we considered such a dispute to be "Arab vs. Arab."  

It has been firmly established by the late Pierre Salinger and others that after events began playing themselves out and the U.S. firmly resisted Saddam Hussein's occupation of Kuwait, all that the Iraqi dictator sought prior to withdrawing his troops was what is termed a "fig leaf" to save face, a very important element for an Arab leader.  

In this case the "fig leaf" was a point that would have been resolved in Saddam Hussein's favor in an international legal tribunal.  He sought to have Kuwait stop illegally siphoning off his oil through the process known as strip mining.  

As for Greenspan, his statement on the "Today" show that was meant to clarify his position reveals the kind of misunderstanding of international affairs that he has surpassed during a lengthy career of bungle, blunder and fealty toward the Republican corporate power brokers in the economic realm.  

Greenspan's career has embodied a display of chaotic ineptitude that has seriously wounded America and many of its citizens.

We know this about Alan Greenspan from evaluating his performance:  This is one leopard that will never change his spots.