This has got to be one of the most amazing things I have ever read.
The meat of it is this:
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.”
Well, the entire economic meltdown hasn’t shocked me. When you believe everyone will just act nicely for no good reason, it shouldn’t be shocking when everything isn’t rosy in the end. What is shocking to me is that the architect of all this modern deregulation (along with Milton Friedman) came out and admitted that it was wrong. I guess he should get a small degree of credit for not gnashing his teeth and blaming poor people and the media, but given his responsibility in this that credit doesn’t go too far in my book. It is fair to say that Greenspan’s realization should (it won’t, but it should) put any pure free market argument to bed for the rest of my life.
In the end, what a weird year. I thought I would see an African American elected President before I saw the ideologue of ideologues, who basically turned this country into a deregulated mess, admit that he was wrong. Guess he figured he only had a few days left to prove me wrong…