BOOK REVIEW
The Fed's king of bubbles
Greenspan's Bubbles - The Age of Ignorance at the Federal Reserve by William Fleckenstein
Reviewed by Julian Delasantellis

http://atimes.com/atimes/Global_Economy/JD26Dj05.html

Even in old Russia under the authoritarian rule of the Tsars, there was a tradition that even the lowliest peasants and workers could petition the Tsar, their "little father", their batiushka, for redress of grievances or intercession with a problem.

One such petition occurred in 1875, in the Ukraine’s Chigrin District. An outside agitator had tried to organize resistance, to stir up trouble, with the local peasantry. After being found out and expelled, a petition asking for Czar Alexander II’s forgiveness was drafted by the locals.

"How could we, simple, backward people, not believe in the

kindness of our beloved monarch, when the whole world attests to it, when we know of his love and his trust for his people, his concern for them."

If you think that such bootlicking fawning obsequiousness could never happen in the United States, freedom’s home, the land where the people rule and the rulers serve, you haven’t watched a Congressional hearing with a US Federal Reserve Board chairman recently.

It happens two or three times a year, and it’s always the same. After an exchange of pleasantries, the Fed chairman delivers his opening statement. During the Alan Greenspan era, this invariably meant about a half hour of indecipherable economic gobbledygook flowing thick like molasses; the financial markets could understand what was being said, and frequently reacted violently in response, but few average citizens could. (Hillary Clinton recently announced that, if elected, she wanted Greenspan to head a commission studying the foreclosure crisis, although, in her continuing effort to prove herself just one of the guys downing shots and beer nuts around the bar in working class Pennsylvania, she admitted that "I never understand what he's saying.")

Then the committe members are permitted to question the great oracle. Sometimes, you can tell that the solon is just reading something written by somebody on his staff who once passed an economics course. Sometimes, since the great augur was obviously in possession of wisdom in all matters of the physical domain, the questions might be related to areas totally beyond the chairman’s purview, like, "Tell me, Mr Chairman, what’s your opinion, chains or studded snow tires?" Frequently, like a local asking for the blessing of a Mafia Don for the success of a new enterprise, the questions would be totally parochial, like, "Tell me, Mr Chairman, isn’t the real problem with our economy the lack of funding for post offices in southwestern Wyoming?", asked by, of course, the representative from southwestern Wyoming.

But the main phenomenon of this process was that the questions were almost always asked with the maximum amount of awe, deference and respect, and, invariably, the questioner would not get a straight answer to his question.

http://atimes.com/atimes/Global_Economy/JD26Dj05.html