Heckuva Job, Alan!

By Jerry Kammer and Jerry Kammer on April 28, 2009

Alan Greenspan, whose unswerving opposition to financial regulation as Fed Chairman steered the national economy steadily toward the abyss, has been invited to share his thoughts about immigration with the Senate. Greenspan heads the witness list for Thursday's immigration subcommittee hearing titled "Comprehensive Immigration Reform in 2009; Can We Do It and How?"

Can Greenspan tell us of a future unencumbered by governmental checks on the excesses of special interests? And how! As Andrew Leonard noted in Salon, when Greenspan hailed the genius of mortgage product alternatives, he fired the starting gun for the Indianapolis Exotic Mortgage 500. Greenspan also spouted magisterial confidence that the burgeoning trade in arcane financial instruments -- which would explode like neutron bombs all over Wall Street -- would actually stabilize markets with the ballast of well-considered diversification.

A quarter-century ago Greenspan's anti-regulatory zeal found expression in his endorsement of the man who would become known as the poster boy of the 1980s Savings and Loan debacle, Phoenix financier Charles H. Keating, Jr. Keating, who had had modest success as a homebuilder, was inspired to buy Lincoln Savings by federal legislation that deregulated the thrift industry. Thus relieved of burdensome restrictions, Keating frantically fueled his federally-insured rocket for a wild ride to catastrophic failure that cost taxpayers more than $3 billion.

Keating had only begun his pillage in the mid-1980s, when federal regulators tried to rein him in. He not only bought political influence wholesale (remember the Keating Five?), he also rented the expertise of consultant Alan Greenspan. Greenspan examined Keating's books and issued a benediction. He assured the feds they should stop worrying so much about Keating's feverish forays into kamikaze finance. Deregulation, Greenspan soothed, was working just as planned.

Greenspan's anti-regulatory convictions flowered in his days as a disciple of Ayn Rand and her philosophy of Objectivism, which celebrated an extreme libertarianism of the sort that sneers at federal regulation of finance (or immigration). When the Senate immigration subcommittee's new chairman, New York's Chuck Schumer, calls a man like Greenspan for advice on plotting the future of immigration policy, it is instructive to keep in mind the sober-minded judgment of the late, great journalist Theodore White about the revolutionary 1965 reform of immigration law. That bill, an expression of the crusading zeal of Sen. Edward Kennedy and others, put the nation on the path that has brought us to today's immigration chaos. White called the 1965 act "noble, revolutionary -- and probably one of the most thoughtless of the many acts of the Great Society."