I speak of course of Alan Greenspan, who in a recent Bloomberg Business Week interview said that he is occupying himself today “trying . . . to figure out” how “fear, euphoria, and herd behavior significantly affect modern economies.”
So THAT’S what caused the crash — extreme happiness coupled with fear and animal spirits. This is the essence of Keynesian economics in terms of its attempt to explain depressions. John Maynard Keynes himself blamed the paucity of private business investment during the Great Depression on “animal spirits.” He hadn’t a clue, in other worlds. Greeenspan’s recent bloviations about “euphoria” and “herd behavior” are his latest attempt to argue that the Fed had nothing whatsoever to do with the Great Recession. (His initial excuse was that the poor in Asia save too much, driving down world interest rates. That didn’t fly, so he’s now resorting to Keynesian gobbledygook).
The biggest knee slapper in the interview is when Greenspan discusses economic forecasting/fortune telling and says: “[I]n economics, we are extraordinarily fortunate that we succeed a majority of the time.”!!!!!!
(Warning: Very scary picture pops up when you click on the above link).7:03 am on August 21, 2012 Email Thomas DiLorenzo