Mark Thoma posts Stiglitz's (is that the proper punc after a z?) criticism of Greenspan. The kicker:
Greenspan supported the tax cuts of 2001 with the most specious of arguments – that unless something was done ... the national debt would be totally paid off within, say, ten to fifteen years. According to Greenspan, immediate action needed to be taken to avert this looming disaster, which would impede the Fed’s ability to conduct monetary policy! It says a great deal about the gullibility of financial markets that they took this argument seriously. More accurately, tax cuts were what Wall Street wanted, and financial professionals were willing to accept any argument that served that purpose... Greenspan’s irresponsible support of that tax cut was critical to its passage. ...
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It is still not clear what led Greenspan to support the tax cut. Was it a massive economic misjudgment, or was he currying favor with the Bush administration? The most likely explanation is a combination of the two, for he and Bush were pursuing the same “starve the beast” political strategy...
Update: From the WSJ's Afternoon Report (11/15) is this from Bernanke's congressional confirmation hearings:
And while Mr. Greenspan has taken heat for addressing tax policy, Mr. Bernanke promised never to answer such questions. "I'm going to begin now, I think, a practice on not making recommendations on specific tax or spending proposals," he said.
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