Quote of the Day – 10.23.08


QUOTE OF THE DAY….From Alan Greenspan, testifying before Congress on the derivatives market:

“Credit default swaps, I think, have serious problems associated with them.”

Ya think? The subprime lending market may have been the trigger for our late financial collapse, but the truth is that the trigger could just as easily been mispriced risk (i.e., irrational exuberance) in a variety of other markets. If subprimes had been regulated better, maybe there would have been a bubble in commercial real estate instead. Or arctic oil drilling. Or online pet food companies. Who knows? Regardless of the trigger, however, it was only when the resulting bubble got multiplied tenfold by opaque global chains of credit default swaps that the bursting of an asset bubble went from routine disaster to worldwide financial meltdown. So yeah: there are serious problems there. Here’s more from Greenspan:

“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,” Mr. Greenspan said.

….Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.

“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

Hmmm. Maybe not quite so well as he thought.

OUR NEW CORRUPTION PROJECT

The more we thought about how MoJo's journalism can have the most impact heading into the 2020 election, the more we realized that so many of today's stories come down to corruption: democracy and the rule of law being undermined by the wealthy and powerful for their own gain.

So we're launching a new Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption. We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We'll publish what we find as a major series in the summer of 2020, including a special issue of our magazine, a dedicated online portal, and video and podcast series so it doesn't get lost in the daily deluge of breaking news.

It's unlike anything we've done before and we've got seed funding to get started, but we're asking readers to help crowdfund this new beat with an additional $500,000 so we can go even bigger. You can read why we're taking this approach and what we want to accomplish in "Corruption Isn't Just Another Scandal. It's the Rot Beneath All of Them," and if you like how it sounds, please help fund it with a tax-deductible donation today.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate