Defending her idea for a Greenspan-led housing commission, Hillary Clinton says:"Not only [was Greenspan wrong on the housing bubble], but the Fed didn't act while he was there. But he has a calming influence still to this day on Wall Street -- don't ask me why because I never understand what he's saying -- but nevertheless people respond to that Delphic oracle approach. I think it would be wise to include him. And recently he's come out and vert smartly so that we have to deal with housing and maybe we need to have some kind of buyout mechanism for mortgages. So he's moved on his understanding and depth of the problemThere is some validity to that. Markets need to be calmed, and Greenspan is their Quaalude. And while folks are making fun of her for saying that she doesn't understand Greenspan, not understanding Greenspan is no different than failing to converse with Mork. He speaks a made-up language. What're you going to do?But the reality of the housing crisis is, in part, that it's a failure of conservatism, a function of regulators who refused, for ideological reasons, to do their job, and who let a massive portion of the economy outgrow the regulatory structure that should have contained it. What worries me about Clinton's personnel decisions here is that she's so set into the The Way Washington Works that she'll let this pass by, let Greenspan come back (thus reaffirming the idea that only this right-wing Rand acolyte can manage the economy), pretend this was just an unstoppable flip of the business cycle, and prove utterly ineffective at using it to create change in our economic policy making or domestic politics. You see this sort of thing in national security all the time: When the respected, establishment voices on an issue all lean right, so too does the conversation. One of the things a new president could do would be use his or her power to elevate new voices. But I've not seen much of that from the Clinton campaign. Her campaign has been hurt by its baffling reliance on the old triad of Penn, Wolfson, and Ickes, and the vision she paints of her hypothetical government appears to include Colin Powell and Alan Greenspan. That's not comforting for those of us who'd actually like to see these conversations move in more progressive, reality-based directions.(Flickr image used under a Creative Commons license from Jose Goulao.)
