Greenspanomics: Beyond Oz and into Bubbleland

Dorothy and her three companions will get to see the Wizard; but not in Oz. To meet the Great Wizard, they must now travel a little further… to Bubbleland. They just need to board the Greenspanomics train at Oz, and sooner or later they’ll get to Bubbleland; maybe just in time to watch a true spectacle of bubble bursts… in housing, securities, and government guarantees.

Oh… that great Wizard! Americans, whether holding the reins of power and wealth or capitalist wannabes, have been praising Alan Greenspan’s economics wizardry for most of a generation, many showing a reverence only bestowed upon the holiest among the holy: a canonized saint while still alive. But, will America ’s next generation hold him, and his balsamic economic theory, in comparable high esteem?

Some of us have long been convinced that this “prophet” our politicians helped create will not only be exposed as a fraud, but be tagged as a villain; although in reality, the villains should be the politicians, and not this mild-mannered valedictorian delivering first edition gobbledygook. Many of us, true unbelievers of predatory economics, have had it with Washington’s economic cult which is herding the middle class and poor of this nation, and marching them in procession to an economics Jonestown, Kool-Aid and all.

Some may go as far as to consider Greenspan’s mumbling in a non-committal way, not solely as a sign of intelligence and knowledge, but an endorsement to administrations in Washington with one track mind: free trade globalization at any cost; even if it changes current priorities or what were long considered as critical interests for the United States.

Free trade globalization may have built-in fairness for much of the world in the long term, but not all nations would benefit from it… certainly not short term. The US is, and will continue to be, adversely affected by it- more so than other industrialized nations. Unlike much of Europe and Japan, where there seems to be a better bond between government and people, a positive trade balance, and a more restrictive loss of their manufacturing base; our own government promotes lowest possible wages, and the unavoidable flight of living-wage jobs. The standard of living for much of our population will continue eroding, but faster, even as the bulls keep dancing merrily on Wall Street.

Greenspan crafted his economic policies to serve the needs of Reagan, Clinton and the Bush Duo… all qualifiedly, if not quantifiably, the same; all making both labor and technology subservient to capital. How would anyone expect any different results? Why is anyone surprised at the fast changing socio-economic makeup of the nation, or even Washington’s keen interest in dismantling the few social guarantees now left?

Policies affecting money supply, balance of trade, management of economic growth and job creation, and staving off inflation have maintained the nation’s standard of living barely afloat, and at a horrific future cost. At the present rate, in less than a decade the US could be carrying an accumulated trade deficit approaching the annual GDP (Gross Domestic Product). What then?

Warren Buffett’s prediction of the US becoming a “sharecropper society” is not a catchy overstatement but reality in the making… the only question being the pace at which it will take place; and the danger that if such change occurs too fast, say within one generation, it will ignite not just domestic conflict but international confrontation.

Americans may soon come to realize that their economic future could have stood a better chance if Rose Greenspan’s offspring had not dropped out of Julliard, or at least had kept blowing his clarinet with Henry Jerome’s orchestra instead of enrolling at NYU. Naïve to think that way! Greenspanomics would have been known by another name.

So it would be escapist in our part to blame present or future economic ills on a man who ascended to prominence less by his mastery of international economics and more as the result of the reigning politics in the US during the past quarter of a century. This is not to excuse his willingness to accommodate the wishes of these politicians. Not just the Republicans, but “the other brother Darrell” Clinton Democrats. Obviously both Clinton and Greenspan make a good wind ensemble with their saxophone and clarinet, with the hot air extending beyond their instruments.

For all the flag-waving and stalwart patriotism that the Bush administration has been promoting throughout the land, the sad reality is that the US military is in fact defending the interests of many flags. Not the flags of nations with a common cause to the US, but those of multinational corporations without alliance to country or people… only to those who give them life through invested capital. Free global trade under sponsorship and military protection of the United States !

Now let’s get back to our young lady from Kansas … and her trip to Bubbleland. One would hope that by now, even before seeing the great bubble-bursting spectacle, Dorothy will come to realize that her friends will not get a brain, or a heart or courage from the Wizard… for this wizard behind the curtain, wizard he is not. Just a personable clarinetist, low-talker, juggler of sorts, and yes… a bubble-maker par excellence.