Lost Without an Anchor, Greenspan Backs Bank Nationalisation

The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, comes the embarrassing opinion of Alan Greenspan, the former Federal Reserve chairman, as he spoke with FT.

Greenspan said nationalisation could be the "least bad" option left for policymakers.

”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”

Most politicos, and that is what the Fed chairman is, turn more free market after they leave office, the fact that Greenspan has gone in the opposite direction, from early on Randian, who penned a paper calling for a gold standard, to Fed chairman, the top anti-gold position in the world, to now a commie supporter of bank nationalism, should come as little surprise. Greenspan has never understood the basics of the business cycle, and the cycle is at the heart of the current banking crisis. In his autobiography, The Age of Turbulence, and I emphasise this man was Fed chairman, he does not mention the business cycle once, despite the fact the book is chiefly a discussion of Greenspan's economic views.Yet, you really can't even understand all the evils of the Federal Reserve without an understanding of the business cycle.


This ancient man is still adrift without an anchor.


Barbra Walters, who once dated Greenspan, understood, years ago that Greenspan has no anchor . In her memoir, Audition, she wrote "How Alan Greenspan, a man who believes in the philosophy of little government...could end up becoming chairman of the greatest regulatory agency in the country is beyond me."

You see, you need the anchor of understanding how the business cycle works, and be able to understand its evils, or, otherwise, you can pretty much justify any wacky economic program and look like an ass to your girlfriends and the world.

A word to the wise, if you don't understand the business cycle, it's time you do. Murray Rothbard's book, The Mystery of Banking is the best explanation of the cycle and the U.S. banking system.