Political Theater: The Congressional Credit Hearings

Today's House Oversight hearing into the credit crisis with witnesses Alan Greenspan, Chris Cox, and John Snow is grim and awful political theater. While not unexpected, it is by far the most politicized hearing we have had to date, with members trying to noisily pin subprime on Barack Obama, entirely on the GSEs, regulators, etc. There are also non-stop attempted gotchas ("Did you know? Huh? Didya?"), plus congress members putting up signs, shouting, and doing everything except throwing spitballs.

One of the few interesting moments so far has been this one with Alan Greenspan:

THE HOUSING BUBBLE BECAME CLEAR TO ME SOMETIME IN EARLY 2006, IN RETROSPECT. I DID NOT FORECAST A SIGNIFICANT DECLINE BECAUSE WE HAVE NEVER HAD A SIGNIFICANT DECLINE IN PRICES.

Got that? Greenspan only noticed the housing bubble in 2006, as it was bursting, and his main reason for not thinking prices would not decline in the U.S. is because the U.S. has never had a significant decline. Sad stuff.

Comments

[SW Richmond:]

Politics IS theater, nothing more. Voting is meaningless, less so now that it is all electronic. This theater is now about blaming someone (Dick Fuld has already been nominated, too bad Dick) so that the politicians can stay in power by being "our champions".

The political process in this country is totally broken. Has Obama really raised $600 million dollars? Why would people give him so much money if they didn't expect something in return? Now that it's apparent he's going to win everyone wants a piece of the action. Rent seekers all.

His signs say he's going to lower taxes, but his ads say we're all going to have health care. Hmmmm...this in an environment where US Treasury debt increased by $340 Billion SO FAR THIS MONTH.

McCain would be no better. Vote for some third / fourth party.

2008 Oct 23 02:36 PM

[Economics:]

Greenspan, you got to be kidding, voluntary regulation? If you put a bunch of thieves in a room with a full piggy bank, what do you get? You get an empty piggy bank! If you put a bunch of thieves in charge of the US banking system, what do you get? You get a bankrupt banking system, unemployment and loss of homes: www.BuyMyHouseBeforeTh...!

2008 Oct 23 04:37 PM

[Jason Rines...:]

Mr. Kedrosky, I am glad you posted this and the mention of Alan Greenspan. It was his statement in May 2007 that spurred my economic study at the time of the US economy which helped warn many people. Few listened but I do remember the 16 hour days that summer preparing while all my colleagues went on vactation and called me a moron to boot.

He stated that the chance of recession because of the housing market was 25%. I stated here in July after completing the study that chance of recession was 100% in 2008, that chance of Depression was 50%. I could give a damn about being vindicated or self-edification, I care about my shareholders, employees, family and friends. That is what is lacking in this nation, morals!

And if we are to change Washington, then it should be our collective objective to accelerate the voter revolution process of removing the corrupt in the House of Reprsentatives. This process occured three other times in our nations history, 1877, 1911 and 1933. The American public 'gets it' about four year after the beginning of the crisis. But who says we as a collective group can't get this done sooner? Like in 2010?

Of course it is incredulous that this man could make this recent statement on the Hill that he felt we have never had a significant decline in housing values. I prefer my grandmothers statement. She lived through the Great Depression: "Never trust bankers, they love foreclosures!" I guess Alan never heard that one before.

2008 Oct 23 04:54 PM

[Tony Petroski:]

Paul Kedrowsky. Cut Mr. Greenspan some slack. I too have never seen Real Estate prices go down--after all, land is finite and the population grows. It has now gone down, so take a few potshots at Alan, but Real Estate will roar back as an inflation hedge once the liquidity starts to circulate and accellerate. After that we see stagflation with Obama in the role of Jimmy Carter, and after that...look me up.

2008 Oct 23 08:49 PM