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Commentaries & market updates.
There he goes again
There he goes again
How many lies does Alan Greenspan have to tell before someone (other than me) notices? During today’s question and answer period following his testimony before the House Banking Committee, Greenspan told several, but two whoppers warrant special attention.
1. When Congressman Ron Paul reminded Greenspan today of his own words (just as I had suggested yesterday) that “inflation is a monetary phenomenon,” Greenspan replied that he was surprised to have learned that Central Banks had proven to be just as disciplined with respect to the issuance of currencies under a fiat system as they had been under a gold-backed system. Not only does Greenspan not believe this statement to be true, it is easily demonstrated to be false by the facts. Money supply has increased far more rapidly without the discipline of gold than with it. Further, while consumer prices general fell over time under the gold standard, they have risen steadily under fiat currency.
2. When asked why minority unemployment is so much greater than unemployment for the general population, Greenspan replied that the disparity resulted primarily from discrimination. This is a perfect example of how Greenspan does not answer questions honestly, but responds with answers that he feels the questioners most want to hear. In this case he did not want to tell a democratic congressman that he believed minority unemployment was higher due to the disproportionate effects of the well-intentioned, but nevertheless damaging government regulations and programs which the congressman himself supports. Since government interference in the labor market creates unemployment, predominately among the least skilled and educated classes, which are disproportionately represented by minorities, minorities therefore disproportionately suffer.
While the validity of the above statement is certainly debatable, the fact that Greenspan believes it to be true is not. Based on the Chairman’s long-held political and economic ideology, Greenspan’s stand of this issue is clear. However, whenever he enters the halls of Congress, he checks any personal convictions, honesty, or integrity, with his hat and coat.
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