Book Notes: Greenspan's Bubbles

I read Bill Fleckenstein's GREENSPAN'S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE. I started reading Fleck about 10 years ago, back then he had a pretty good column that just ripped the dot-com stocks and bubble. Greenspan was a constant villain, always acting to save the bubble from itself. This book is Fleck's revenge.

As analysis it's lacking, most of the book is diatribe and assertion. To it's credit the book contains numerous quotes from the FOMC meetings back in the day, they give some insight into why Greenspan was so ineffectual.

First he subscribed to a species of market fundamentalism, a belief that the masses could never be wrong (or at least not second guessed) even in the face of overwhelming evidence to the contrary. A bubble then could never be diagnosed in the present, it could only be seen in the past after the market turned and it deflated. This belief by itself wouldn't have hurt Greenspan that much, in effect it says the Fed should ignore the stock market. Unfortunately Greenspan extended this logic by assuming that if the market is always right, and people want to be happy, then the market should always be happy. If it's not, ie if there are significant declines across indices it implies an externality and Greenspan saw it as his duty to counteract it. In short, he completely misunderstood or ignored the necessity of creative destruction, that creating losers is as critical a market function as creating winners.

I'd recommend the book for those nostalgic for the dot-com days.

Back

I haven't posted anything in the last few months because of time constraints. I also started using Facebook for posting, I'm not sure I'm as satisfied with the results. Point being, I expect to post here more often.

POW: Naomi Wolf

The National Constitution Center podcast an excellent interview and discussion with Naomi Wolf about her newest book, Give Me Liberty. Wolf addresses the closing of American society and it's consequences squarely, and provides useful guidance on how to combat it. It's enough for me to head to the library...

Book Notes: Maxed Out

I finished reading Maxed Out the other day.  Extended thoughts are here.  I remember watching the documentary maybe a year ago and not thinking much of it, reading the book today has more (a lot more) salience.  Recommended reading for those who think the finance companies should not have been bailed out.

POW: James Bamford

C-Span's Book TV has a podcast interview of James Banford, author of "Shadow Factory: The Ultra-Secret NSA from 9/11 to the Eavesdropping on America". This book broke the story about how the NSA listened to phone sex between soldiers in Iraq and their spouses at home.

Bamford says some bad things about General Hayden, then head of the NSA and now DCI.

Food for thought: The NSA now and in the future is going to regularly confront messy issues over when and who they can eavesdrop on. Given that fact, wouldn't it make sense for the agency head to have some experience with the legal framework covering domestic surveillance? That is opposed to someone experienced with surveillance in foreign countries, where such activities are necessarily outside the law. Put another way, if you want a legal domestic surveillance product then you might look for someone who knows how to do legal domestic surveillance. Just saying...

The other thing I'd want to remember- Bamford's sources describe targeting people for assassination based on intercepted conversations in languages they don't even understand. Death by Bureaucracy!

Fall 2008 Berkeley Podcasts

Two courses looked interesting in the Fall 2008 Catalogue:

Economics 113, American Economic History taught by Brad Delong!
Geography C110, Economic Geography of the Industrial World

I'm looking for perspective on the current economic crisis...

I'm also trying a video cast course,
International and Area Studies 180

Good Op-Ed

I don't have as much time for reading as I used to, but this piece by Andrew Bacevich stood out enough that I remembered it a week later. As good a short wrap up of Bush's administration as I've seen.