Tuesday, August 19, 2008

Alan Greenspan's Irrational Exuberance

Alan Greenspan autobiography,
soon to be published by Goldilocks Economy Press

Alan Greenspan isn't content to rest on his achievements, the last of which during his stint as Federal Reserve Chairman from 1987 to 2006 was to pump up the housing bubble. Looking at the bear market following the previous dot com bubble, he presided over a lowering of the fed funds rate all the way down to 1 percent through 2004, and then a very gradual rise.

Result: the housing mania with all its foolishness and abuses — mortgage loans to borrowers with no prospects for repaying them, packaging the toxic loans and turning them into securities few fully understood, selling them to other financial institutions and eventually the ultimate sucker, the U.S. government quangos Fannie Mae and Freddie Mac; homeowners using their temporarily skyrocketing equity as a source of E-Z credit.


We all know where it led, once the contraption self-destructed. Millions of foreclosures and banks and developers lumbered with empty houses no one is buying. But the Wiz has another solution, even greater than his solution for the post-dot com bear market:
Alan Greenspan recently floated an intriguing way to increase American home prices — let in more immigrants. As the Wall Street Journal paraphrased it the other day at the very bottom of an article reporting on an interview the paper had with the former chairman of the Federal Reserve: "The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy."
The New York Sun, which reported the story, is thrilled with the idea, except that it doesn't go far enough.
The only amendment we would make is that it is not only "skilled" immigrants in the definition of labor economists we need, but unskilled ones, too. For it's not unheard of for an unskilled immigrant, or his children, to acquire skills. A fact that can't have escaped Mr. Greenspan, himself a grandson of immigrants.
For the Sun's editorial board, surveying the country from their 2,426th-story office in Mahattan, it's win-win-win all the way around. Happy realtors and developers. A more overpopulated United States (the only way to live, as New Yorkers know — screw those doofs in flyover country who, can you believe it, actually want to to live in single-family houses and drive cars!). A healthier investment climate. Plus a bonus, an acceleration in race replacement. On the current schedule, whites will become a minority only around 2050.


Why so flopping slow? As long as there's a white majority, they might block the North American Union! They can't be counted on to do what they're told like Third World servants! We can't wait another 40 years to have a country that works as well for the global corporate elite as Mexico City does!

"Listen, Greenspan, we have a new job for you. Yes, yes, you did well all those years, and you have your reward, but we need another little favor. You talk, they listen. We're sending you a script … ."


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