Through the looking glass

October 23, 2008 1:57:01 PM PDT
It's an Alice-in-Wonderland world to hear the superstars of government finance now say they were dead-wrong in thinking that a free-market approach would mean self-regulation among corporations and highly paid executives.

The latest mea culpa comes from Alan Greenspan, the former Federal Reserve Board Chairman whose middle name for 18 years was "deregulation."

Now, too late to do anything about it, Greenspan has changed his mind.

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Greenspan testified.

As for the free-market philosophy that he clinged to like a security blanket during his tenure steering the Fed, in a bit of candor that would be remarkable if the proverbial horse wasn't already out of the barn and a couple of farms down the road, Greenspan said, "I have found a flaw. I don't know how significant or permanent it is. But I have been very distressed by that fact."

He also described the current crisis as a "once in a century credit tsunami."

And now we're seeing what deregulation has wrought. Ironically, those who pushed the free market the hardest are now engaged in the exact opposite - the nationalization of private companies.

Greenspan, not surprisingly, wasn't optimistic about the short-term prospects for the economy.

It's ironic that John McCain and Sarah Palin are criticizing Barack Obama for pushing "socialism" for wanting to cut the Bush tax cuts for the wealthiest Americans. That's not socialism. Socialism is the public ownership of the means of production. And socialism for corporations is what we're now engaged in - bailing out companies and executives who took foolish risks with other people's money.

We'll have the latest on the economic crisis, Wall Street and Greenspan's testimony, tonight at 11.

We'll also have the latest from the campaign trail.

One more Alice-in-Wonderland item regarding politics for you: With oil and energy such hot topics, attention is now turning to Cuba, where the estimate is now up to 20 billion barrels of oil under the waters off that country's northwest coast.

There is some talk now of oil companies -- OIL COMPANIES! -- getting an exemption from the Cuban trade embargo. It's an intriguing issue, because the Bush Administration has been more than hardline against Cuba. If there's a change in political parties in the White House, that hardline will ease up.

Also at 11, we'll have the big vote today by the New York City Council on whether to bypass voters and extend term limits. There's only one goal here: To give Mayor Bloomberg a chance to seek a third term. Would Mr. Bloomberg, a multi-billionaire, be able to help the City during these tough economic times? Perhaps. But the voters have twice expressed their desire to see two-term limits for the Mayor and all local elected officials. The Mayor and the Council members ran for and were elected to office knowing there were term limits. For them to vote themselves an extension, without voter approval, will reinforce the skepticism about politicians that already exists in the general population.

But that is exactly what they did today. The Council voted -- 29 to 22 -- to do an end-around New Yorkers, not allow them to decide this issue, and voting to extend to three terms the tenure of elected City officials.

There were all sorts of charges and countercharges in the Council - one councilman even said there were "bribes" made.

Now, the voters will have to step up. One councilman opined that even though Mayor Bloomberg "won today - he will be the big loser" in the long run.

We'll have the latest on the term limits vote, tonight at 11.

We'll also have any breaking news of the night, plus Lee Goldberg's AccuWeather forecast, and Marvell Scott, in for Scott Clark, with the night's sports. I hope you can join Liz Cho and me, tonight at 11.