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Sunday, September 22, 2013

SHUTDOWN COUNTDOWN: 10 days -- ALAN GREENSPAN WARNS: 'no viable long-term solution to our badly warped economy'

SHUTDOWN COUNTDOWN: 10 days -- ALAN GREENSPAN WARNS: 'no viable long-term solution to our badly warped economy' without fixing political system -- WHITE HOUSE SIGNALS Janet Yellen nomination coming

FIRST LOOK – ALAN GREENSPAN, Fed chairman from 1987 to 2006, in a book out Oct. 22 from The Penguin Press, “The Map and the Territory: Risk, Human Nature, and the Future of Forecasting”: “Our highest priority going forward is to fix our broken political system. Short of that, there is no viable long-term solution to our badly warped economy. In America we are being pulled apart politically in ways unrivaled since the aftermath of the 1929 crash. … My first realization of a striking shift in our politics was brought to my attention by the staunch conservative three-term senator from Utah, Robert Bennett. He feared that despite his strong approval ratings, his 2010 reelection bid was by no means secure. In his 2004 reelection, Bennett won 69 percent of the vote. His problem, as he stated it, was unexpected contenders for his Senate seat from his political RIGHT. [The 18-year veteran finished third at the Utah Republican convention and his seat is now held by Sen. Mike Lee, an instigator of the effort to shut down the government over Obamacare.] It was my first awareness of what later came to be known as the Tea Party, a political movement that emerged in 2009 and became a powerful force in the 2010 election. …

“Both uncompromising sides of our ongoing debate on fiscal and other issues need to recognize that financial crisis lurks should we fail to resolve our deeply disruptive fiscal imbalance. And that imbalance is far greater than the official data portray [because of contingent liabilities to the U.S. government from possible rescues of large financial firms and iconic nonfinancial firms] … At risk is the status the American economy has held as the preeminent world economic power for more than a century. …

“My introduction to ‘political Washington’ came in the 1960s when I was first invited to the dinners that were hosted by the Washington Post’s Katharine Graham, pundit Joseph Alsop, and others. To my recollection, the invitees to these dinners were ritualistically half Democrats and half Republicans. Today, attendance at similar dinners is predominantly a 95 to 5 percent split, with either Democrats or Republicans in the majority. … The bias toward unconstrained deficit spending is our top domestic economic problem.”

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