I don't want to be one of those bloggers that just copies some text from a news story and calls it a blog post (that's mostly what Michelle Malkin does), but I don't have much time to write a big post right now, and this is pretty interesting stuff.
Stephen Roach, the chief economist for Morgan Stanley & Co. (nyse: MWD), one of the most powerful investment banks and one of the 50 largest companies in the world, says Greenspan has "driven the world to the economic brink."
Writing in an upcoming issue of Foreign Policy, Roach says that when Greenspan steps down as chairman of the Federal Reserve next year, he will leave behind a record foreign deficit and a generation of Americans with little savings and mountains of debt. Americans, Roach says, are far too dependent on the value of their assets, especially their homes, rather than on income-based savings; they are running a huge current-account deficit; and much of the resulting debt is now held by foreign countries, especially in Asia, which permits low interest rates and entices Americans into more debt.
4 comments:
It appears that Ackman is parroting Roach who is blaming Greenspan for the poor economic policies of the Administration and the bad financial habits of the American people. In response, one should note that Greenspan has decried the "irrational exuberance" of the bubble years and called out the Administration for their spendthift policies.
The guy has one vote on a board of people who control interest rates. Yes, that's a powerful position, but it's naive to lay all the blame at his door.
Yours truly,
Mr. X
...unlikely apologist...
Pitty you didn't say what you, as a libertarian think about the issue. If Americans want to spend themselves into debt, go ahead would probably be your answer.
Ah besides, the dollar exchange rate will take care of the inbalances.
The New Democrat
Ricky, our government's policies encourage debt. There's the home mortgage interest tax deduction which has contributed to the problems Roach complains about, and the federal government is practically forcing student loans onto college students ensuring that my whole generation already starts out in debt.
Government should let the free market decide if college education or home ownership makes sense.
"...federal government is practically forcing student loans onto college students ensuring that my whole generation already starts out in debt."
WHAT?!? Would you care to at least post some compelling reasoning behind this otherwise vapid rhetoric?
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