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Professor blames Greenspan for US Economic woes
/24-7PressRelease/ - ATLANTA, GA, September 22, 2007 - Isola Busuyi, a professor of Management at Brown Mackie College- Atlanta said Alan Greenspan's policies have done more damage to this economy than anyone could blame the Bush administration for. The seventeen consecutive rate cuts he started have led to the near collapse of the entire economy. The 50 points federal funds rate cut announced by the Federal Reserve Bank on Tuesday was one of the steps others are taking to correct these errors. Even the Congress is now discussing how to right the wrongs. A few weeks ago, the Federal Reserve Bank had to pump $60 billion into the real estate market to stop the stock market's free fall. A few days later they dropped the feds discount rate by another 50 points.
In August 2007 mortgage lenders announced a total of 30,892 job layoffs (Sutton, 2007). In the same month, Countrywide announced that its average daily application volume fell by 12% (businessweek.com, 2007). When asked to suggest solutions to the problem, most analysts did not mention Iraq or Afghanistan; they said buyers might be lured back to the market if interest rates were reduced to comfortable levels. The fact that the Federal Reserve Bank is now using three of its most potent monetary management tools to correct the problem is also a testimony to the fact that interest rate hikes are somehow responsible for these problems. What is beyond me is the attempt to blame the administration instead of taking responsibility for the current dire state of the economy.
CnnMoney.com (2007) claims the total job loss from financial institutions this year alone is over 107,000. The website claimed the loss is well on its way to surpass the 2001 job loss record. When people feel good about their real estate investment, they buy vehicles and other items. Since the start of the rate hikes, even GM and Ford have announced more than 60,000 job cuts. Cox (2007) said 156 institutions have filed for bankruptcy since the sub prime collapse started. Estimating the total impact of these rate hikes on the entire economy is almost an impossible task. In August 2007, Georgia ranked fourth in foreclosure rates for the entire country. Realty Trac (2007) reported that one out of every 165 houses in Georgia was under foreclosure proceedings. The impact of these foreclosures on the families involved is extremely hard to quantify.
The much revered world's financial guru should at this time be willing to level with us on the failure of the policies he engineered rather than throwing more dirt on the administration for spending on Security. In commenting on the current crisis, Delasantellis (atimes.com, 2007) said the Fed seems to have abandoned Alan Greenspan's policies. Why would they abandon a working policy? A great US Marine once said I am here in Iraq fighting these radicals so I don't have to fight them on the streets of New York. If there is any cause more noble than that I don't know what it is.
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