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Don't Blame Greenspan for the Failure of Others

July 25, 2002

Re Peter Gosselin's July 21 news analysis suggesting that Alan Greenspan may be a principal cause of the stock market bubble that is collapsing with a vengeance: Are you serious? How, pray tell, does the Fed become responsible for the regulation of accounting firms and the financial statements prepared by public companies?

Gosselin quotes a critic from Morgan Stanley, of all places. To come to the real culprits, just where was our "investor's advocate" SEC while all of this was going on? (Rubber-stamping all those "vapor" dot-com initial public offerings.) And why didn't "friend of the little guy" Arthur Levitt Jr. [SEC chairman from 1993 to 2001] dare to raise the issue of irrational exuberance instead of relying on Greenspan to do his job?

Where was the National Assn. of Securities Dealers? Could it truly not see what every sensible person knew: that the "research" put out by its principal member-firms was unadulterated garbage being issued solely to get underwriting business and hype these "vapor" stocks to fuel a demand for still more underwriting business?

The Times owes Greenspan a front-page apology.

Robert Grunburg

San Clemente

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It seems that Gosselin is trying to shift the blame for the stock market bubble collapse from greed in all quarters to Greenspan for not preventing it. This is a Catch-22 for Greenspan. Had he punctured the bubble on the way up, everyone would have screamed bloody murder. Now he is blamed for not doing it.

Greenspan has said many times that his job description only is monetary control, not the stock market. But he did give fair warning.

Dana Swan

Newbury Park

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To you people who call the "surplus paying down the debt" prosperity of the '90s a "bubble," I say: You wouldn't recognize prosperity if it jumped up and bit you on the nose.

Joseph C. Cavella

Malibu

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Having just retired after working in a variety of middle-management positions for more than 45 years, I can easily explain Enron, WorldCom, Global Crossing and all the other companies that were mismanaged. Creative accounting combined with greed is part of the reason, but the primary explanation can be found in every boardroom of every company.

Most chief executives run their companies like dictatorships. They might hold meetings with their vice presidents, but no matter what they are discussing, the CEO only wants them to rubber-stamp a decision that he or she has already made.

For things to improve, senior executives must put their company first and their CEO second. But they won't do that because they don't want to lose their perks and high-paying jobs.

Instead, high-level managers just bounce their heads up and down in unison. The few senior executives with the guts to tell their CEO the truth probably meet weekly--on the unemployment line.

Harry Brande

Laguna Woods

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