I’ve been wondering for a while where was Alan Greenspan in the midst of the economic crisis, when he suddenly he shows up in a House inquiry. The former Federal reserve chairman was once considered a god among men, with people all over the world trying to read his mind to get a clue on forthcoming economic policy. Now he’s forced to defend himself from allegations that he inadvertently helped create this debacle.
Good that Greenspan admits that there was a weakness in the system he shepherded. But then, no one can foretell the future, and economics is in large part educated guesswork. This inquiry is borne of the public’s need to blame someone–anyone–for this mess. This crisis was primarily caused by people who bought what they couldn’t pay for and by predatory creditors who lent them money anyway. Can you blame the razor company if customers bought their products so they could slit their own necks?
Hindsight is the most critical of everything.
What’s interesting is Greenspan, an avid “Randian” who believes in true Laissez Faire, now admits that markets aren’t self-regulating as he earlier believed.
Others like Soros, who believe in fallibility and more government regulation may have their views supported now.
[…] A believer in market regulation, Soros thinks the crisis can abate if and only if governments come up with a better plan to neutralize the excesses in the financial system. Contrast his views with the laissez faire advocates such as Greenspan. […]