Thursday, October 23, 2008

Greenspan Finds A Flaw In His Thinking

Alan Greenspan now says that he has found a flaw in the "free market ideology" that has guided him.

Just when you think that Greenspan can't sink any lower, he makes sure to prove you wrong. After having spent the last few years defending himself and argued that there was nothing wrong with the government interventions which he was responsible for, he now tries to prove his humility by arguing that his one error was that he didn't believe strongly enough in government interventions.

As Butler Shaffer puts it, he seems to have his own version of an old slogan of his former mentor Ayn Rand: "Big government-America's most persecuted minority"


Blogger Kelly said...

Just when you think Greenspan can't sink any lower, he somehow manages to do so. It's frustrating because my co-workers here in California all believe that the market failed because of deregulation and that there wasn't enough government intervention. They all support Obama, and honestly I like the guy, but my conscience won't let me vote for him knowing that he will be something like the next FDR.

12:21 AM  
Anonymous Anonymous said...


3:56 PM  
Anonymous Aragon said...

Financial authors Bill Fleckenstein and Fred Sheehan have written a very anti-Greenspanian (=objective) about the era when Greenspan was in the FED. They conclude their book Greenspan’s bubbles with the following statement about Greenspan, the man and his capabilities to see mistakes:

Viewing his own “accomplishments” through rose-colored glasses obfuscates the harsh reality we are all forced to live with now. Yet, Greenspan’s major shortcoming –and critical flaw- was not his mistakes, but his refusal to admit them. Thus, he never learned from his errors in judgment, repeating them time and again over the course of 19 years.

I can remember only one really courageous decision by Greenspan; that was when he raised the Fed funds rate after the NASDAQ had peaked. But, on the other hand, maybe he took the crash only as a little disrupt in the “productivity revolution” and didn’t see the whole picture.

3:59 PM  
Anonymous Anonymous said...

FDR is "Franklin D. Roosevelt".

Pardon my ignorance but FDR was a republican whereas Obama a democrat. How does Obama could be a next FDR then ... ? Puzzled.

7:22 PM  
Blogger stefankarlsson said...

Actually, FDR was a Democrat. But even had he been a Republican, Obama could have been a new version of him if the actual policies he pursues are similar enough. That is why Obama could also be seen as a new Herbert Hoover, as Obama's policies are nearly identical to Hoover's with higher marginal tax rates, higher spending, trade protectionism and efforts to prevent nominal wage cuts.

8:47 PM  

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