Alan Greenspan,86,former Federal Reserve Chairman,is halfway through writing his new book.He's been asking why did the most sophisticated technologies fail to capture the greatest crisis on September 15,2008?There are certain things that simply cannot be forecast,Mr.Greenspan answers.Animal spirits can't be defined in terms of numbers.
The only way to preserve Europe is a political consolidation of Europe.You're trying to put together a whole series of different cultures.They must be under the same political tent.
In my experience,the Glass-Steagall Act of 1933,which separated commercial banking from investment banking and was later repealed, is not where our problems lie.Productivity goes up because we add cutting edge technologies.If you're gonna use our scarce savings to finance questionable institutions,you're not gonna have money for cutting edge technology.Banking couldn't exist without the taking of risks.Some of the bank's portfolio will fail.Without risk,there is very little by way of innovation.Creative destruction is what moves our economy forward.
The only thing Europe is currently doing is financing deficits;not eliminating them.It's taking the easy way out,with very negative long term consequences.That is not conducive to a stable system.The American economy looks very sluggish to me.Over 90% of it,the non-durable goods,is doing fine;the other 8% is down by 50%,Mr.Greenspan noted.
Alan Greenspan was Federal Reserve Chairman from 1987-2006.He is the author of the best-selling "The Age of Turbulence."