In my post of yesterday, drawn from the Pittsbugh Post-Gazette essay, I mentioned how Alan Greenspan's book, The Age of Turbulence, doesn't address predatory lending. In fact, readers searching for references to the many consumer law statutes the Fed interprets or enforces or both--including Truth in Lending, HOEPA, the Consumer Leasing Act, and the Electronic Funds Transfer Act--will largely be disappointed. I suppose that a book about those subjects would sell fewer copies than the book that Greenspan actually wrote. And make no mistake: Greenspan's book is a terrific read on his life, economic history, and economic theory. But to reinforce the point I made yesterday, isn't something wrong when the memoir of the person at the head of what is probably the agency with the greatest power over the rules governing consumer credit transactions gives those rules such short shrift? Not that I blame Greenspan. He was appointed to the job because of his mastery of macroeconomics. But again, shouldn't someone who has mastered the law of consumer credit run the principal agency devoted to that subject? In other words, at the risk of beating a dead horse, is the Fed the best agency to administer consumer credit laws?
Two other points about the book: Greenspan notes at one point that bank examiners rarely find bank fraud, and observes that as a rule regulators learn about bank fraud from whistleblowers. Kind of makes you wonder if bank examiners ever find violations of consumer protection laws.
Finally, Greenspan is an ardent believer in competition and free-market capitalism. Reading his book is a nice counterpoint to Reich's Supercapitalism, about which I blogged here earlier this week: one touts the benefits and the other the costs of competition.