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Greenspan: “I was wrong”
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This is an excerpt from the NY TIMES about Greenspan’s grilling by lawmakers in Washingon:
Mr. Greenspan conceded a serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
“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.”
Bit late maybe.
but I wonder how much of the problems were due to ownership. I.e people buying shares on the belief that the price would rise. rather then buying shares as a long term investment where stability of the company would be rewarded rather then unstatanable profits. But I think we will not truly understand this whole shabang until it is gone.