Alan Greenspan admitted today to a congressional committee that the economic ideology, the worldview, by which he made decisions as Fed Chairman was fundamentally flawed. Markets and banks actually do need oversight and regulation by government.
This is simply unbelievable. It's like the Pope saying that 'papal infallibility' is wrong. (I write more about the dying Conservative movement here.)
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.
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.”
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