In an op-ed column in this morning’s Financial Times, former US Federal Reserve chairman, Alan Greenspan, predicted “unanticipated adverse outcomes” resulting from the implementation of the Dodd-Frank bill recently passed by the Congress in response to the recent disastrous consequences resulting from years of deregulation, aided and abetted by Greenspan himself. The basis for his prediction? The modern financial system is too complex to regulate. Noting that the Dodd-Frank act will result in “a couple of hundred detailed regulations,” he goes on to warn that they “may create the largest regulatory-induced market distortion” since price controls in 1971. As a measure of the growth in complexity, Greenspan related that the share of the nation’s gross domestic product represented by the financial and insurance industries has tripled since 1947, expanding from 2.4 percent to 7.4 percent. Amazingly, he attributed today’s level of productivity and standard of living to that complexity. He fears that simplifying the financial system may endanger further growth. Notable in its absence is any mention of the concentration of wealth and the resulting joblessness, homelessness, poverty, etc. Seeking Greenspan’s advice on economic and financial matters would be about as worthwhile as eliciting an opinion on geopolitics from Henry Kissinger.
Today Michael Franti & Spearhead will try to get your attention with “Hey World.”