Greenspan’s Mea Culpa

[¹²³]

Here’s a fascinating exchange between Alan Greenspan and Representative Henry A. Waxman from today’s hearing on Capitol Hill (as reported by Michael Grynbaum):

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.

“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

Link

 

[Dumpy]

He believes that capitalism, unchecked by regulation, is the best way to grow the economy.

He didnt grasp that banks, unregulated, would go bankrupt.

Specifically, in the rest of his testimony, he discussed derivatives and exotic investments. He used to believe that these things didn't need to be regulated, and in fact helped create the foundation for what has happened now by pushing for no regulation of these investments. Now he is admitting that he was wrong.

 

[Haakzilla]

...I worked in the mortgage industry ['04-'06] and I find it very hard to believe that he is so "shocked" by the outcome of such deregulation, especially with all of the hybrid/exotic loans that were being approved for anyone with a SS#, credit rating above poor, and a bank account!!!

 

[¹²³]

Well, there is some people that truly believe that a laissez-faire economic philosophy is the way to go and it seems Greenspan is/was one of those.

 

[maxiep]

The problem with the credit market wasn't too little regulation, but crappy regulation. Everyone from the buyer to the real estate broker to the mortgage broker to the appraiser to the bank to Fannie and Freddie to the rating agencies to the investment banks to the insurance companies. There was no incentive to stop the good times from continuing to roll.

 

[Haakzilla]

The problem with the credit market wasn't too little regulation, but crappy regulation. Everyone from the buyer to the real estate broker to the mortgage broker to the appraiser to the bank to Fannie and Freddie to the rating agencies to the investment banks to the insurance companies. There was no incentive to stop the good times from continuing to roll.

|too little regulation = crappy regulation|
|crappy regulation = too little regulation|

 

[PapaG]

He believes that capitalism, unchecked by regulation, is the best way to grow the economy.

He didnt grasp that banks, unregulated, would go bankrupt.

Specifically, in the rest of his testimony, he discussed derivatives and exotic investments. He used to believe that these things didn't need to be regulated, and in fact helped create the foundation for what has happened now by pushing for no regulation of these investments. Now he is admitting that he was wrong.

Ignore the truth...again...

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[PapaG]

Re-writing history...

Watch this video and educate yourself, or don't, and I have to consider you ignorant.

 

[PapaG]

Hmm, watch Clinton 8:10 into this video until the end.

 

[maxiep]

|too little regulation = crappy regulation|
|crappy regulation = too little regulation|

Not at all. You can have as much regulation as you want, but that doesn't make it effective regulation.

 

[PapaG]

Not at all. You can have as much regulation as you want, but that doesn't make it effective regulation.

Again, watch the video I posted. Funny thing is, it tends to sink to the bottom of the page whenever I bump it.

 

[bodyman5001]

My friend at work won't believe me that the Democrats are to blame for this mess, and it seems that people will watch these videos and STILL refuse to believe it.

The Republicans are to blame for a whole bunch of things but this isn't one of them.

 

[¹²³]

I am not sure we can put all the blame on one of the two parties.

 

[bodyman5001]

I am not sure we can put all the blame on one of the two parties.

I am pretty sure we can put most of it on the Democrats.

If I wanted to blame someone for increasing the huge debt we have it would be the Republicans who want to cut taxes and raise spending.

Until I see a video of a Republican saying how we need to push home loans on brokeass people because it is more FAIR that way, I will blame the Democrats.

THEY ARE ALL STUPID.

Does anyone honestly think it is right that people take sides because of their party affiliation? Watch that video and see how split they are in the way they view this issue. Somebody is full of shit in this video, you tell me who that is.

 

[¹²³]

THEY ARE ALL STUPID.

I can agree with that. Both parties are stupid.

 

[Dumpy]

Re-writing history...

Watch this video and educate yourself, or don't, and I have to consider you ignorant.

(1) The video does not have anything to do with Greenspan or his views.
(2) The issue of who to blame for this mess should be the subject of another thread. In fact, it IS the subject of another thread. Go ahead and bump it if you want.
(3) The point being made here is that Greenspan now agrees that more regulation is needed, which is quite shocking.
(4) I don't know whether the "I have to consider you ignorant" comment quoted above refers to me. I'm going to take the high road and assume not, since it is not at all relevant to my post in this thread (even though it was directly preceding).