Should Alan Greenspan be investigated for criminal corruption and fraud?

It's pretty obvious his incompetence caused the housing bubble (note - that quote above was from LAST fall). But like Mike Brown and Alberto Gonzalez, you don't go to jail for being a boob.

But corruption, that's another thing. For Alan Greenspan to call in 2004 for the creation and use of Option ARMs and Liar's Loans, and for Americans to rush into adjustable rate mortgages, right before a record string of interest rate hikes, is beyond incompetence, and most likely $$$ from the Mortgage Brokers Association. And the Fed, who is supposed to oversee banks and lenders, let things spin totally out of control during the bubble. Oversight? Regulations? Guidance? Nah!

You would think something funny was going on behind the scenes. Or payments or promises of future payments (like speaking fees to groups like the the corrupt mortgage bankers) being made. Follow the money.

So, should Alan Greenspan be investigated for criminal corruption?

Alan Greenspan played a major role in the housing boondoggle.

On February 26 2004, he said, "American consumers might benefit if lenders provide greater mortgage product alternatives to the traditional fixed rate mortgage. To the degree that households are driven by fears of payment shocks but willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."

Greenspan tacitly approved the whacky financing which produced all manner of untested loans - including ARMs, piggyback loans, "no doc" loans, "interest only" loans et cetera. These loans are a break from traditional financing and have contributed to the increase in bankruptcies.

Millions of people who were hoodwinked into buying homes with "interest-only", "no down" loans will now either lose their homes or be shackled to an asset of decreasing value for the next thirty years. They've been tricked into a life of indentured servitude.

A recent article in the Wall Street Journal revealed the extent of Greenspan's involvement in the housing fiasco. Here's an excerpt from the article:

"Edward Gramlich, who was Fed governor from 1997 to 2005, said he proposed to Mr Greenspan in or around 2000, when predatory lending was a growing concern, that the Fed use its discretionary authority to send examiners into the offices of consumer-finance lenders that were units of Fed-regulated bank holding companies.

"I would have liked the Fed to be a leader" in cracking down on predatory lending, Mr Gramlich, now a scholar at the Urban Institute, said in an interview this past week. Knowing it would be controversial with Mr Greenspan, whose deregulatory philosophy is well known, Mr Gramlich broached it to him personally rather than take it to the full board.

"He was opposed to it, so I didn't really pursue it", says Mr Gramlich. Still, Mr Greenspan's views did color the regulatory environment, facilitating growing concentration in banking and a hands-off approach to derivatives and hedge funds. That approach, broadly shared by both the Clinton and Bush administrations, is coming under increased scrutiny." (Wall Street Journal)