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As something of a follow-up to the previous post, Alan Greenspan himself has proven surprisingly willing to point the finger...at himself:
“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.”And though I'm tempted to say his unwillingness to propose new regulations is something of a dodge, he's probably right that “Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets. Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.” On the other hand, that's exactly why this is a good time to construct a new regulatory regime. It's always easier to set boundaries beyond current behavior than try and rein a sector in when it's wild with profit.
