Greenspan’s Legacy: Lots of Debt and No Jobs

January 31, 2006 – Federal Reserve Chairman Alan Greenspan steps down today after 18 years and five terms as the most powerful man behind the U.S. economy. Pundits and politicians of all persuasions have entered a realm of “irrational exuberance,” ignoring record deficits and lost jobs to heap praise on Greenspan’s handling of the nation’s economy.

“Alan Greenspan made the world safer for corporations and banks. But for average Americans, Greenspan’s legacy is lots of debt and no jobs. His policies have hollowed out our manufacturing base, caused record trade deficits, sent millions of jobs overseas, and burdened our children with crushing debt,” said IAM President Tom Buffenbarger. “Ask the workers in towns across North America who made Ford automobiles, Maytag appliances, Levis clothes, Zenith televisions, and everything else that’s now made in Mexico or China, what they think of Alan Greenspan.”

After choking off the booming economy of the 1990’s with sharp interest rate hikes, Greenspan supported President Bush’s tax cuts in 2001. The federal budget quickly went from running surpluses to deficits. In 2004, the International Monetary Fund warned that ballooning U.S. debt levels threatened the world economy. President Bush promised the tax cuts would create millions of jobs, but the actual number of jobs lagged well behind other recoveries and Bush’s own projections.

The IAM Journal, in a 2001 article titled “Dream Stealer,” explored the detrimental effects Greenspan’s policies have on working families. “Corporate profits are up, stocks are up, but working families are down and almost out in the global free-for-all coming our way. We must change the cast of characters in Washington who are ruining our nation’s economy and stealing the American dream,” said Buffenbarger. President Bush has nominated Ben S. Bernanke to succeed Greenspan.