It’s never too late to blame Greenspan
Alan Greenspan hasn’t been chairman of the Fed for three years, but his policy mistakes keep paying dividends in the form of blame at this year’s World Economic Forum in Davos.
Polish Finance Minister Jacek Rostowski yesterday:
“This was the failure of one of the key institutions in the world.” During the Greenspan era he said they continually met downturns and distress with easing and “eliminated fear.”
Ken Rosen of Berkeley, who was writing about the housing bubble in 2005 or so, is in the same camp:
“Alan Greenspan personally prevented some needed regulations being put in place. The free market fundamentalism we had was a mistake, to go the other way would also be a mistake.
We had excessively loose monetary policy and regulations on these aggressive loans were not put in place. There were Fed board members who wanted to do it, and Greenspan himself said the had too much belief in the market. …it was a global problem of excess credit led by the central bank in the U.S. but ratified by the central banks around the world.”
Maybe history will be kinder to his reputation as a jazz musician.
James Saft is a Reuters columnist. The opinions expressed are his own.