Greenspan Concedes to `Flaw' in His Ideology; Ayn Rand Spins in Grave

http://www.EmploymentCrossing.com Former Federal Reserve Chairman Alan Greenspan told Congress that a “once-in-a-century credit tsunami'' has engulfed financial markets, and conceded that his free-market ideology shunning regulation was flawed. “Yes, I found a flaw,'' Greenspan said in response to tough questions from the House Committee on Oversight and Government Reform. “That is precisely the reason I was shocked,� Greenspan continued, “because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.'' Greenspan said he was “partially'' wrong in opposing regulation of derivatives, and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected. Forecasting is an inexact science, he said. In May 2005 speech, Greenspan said that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.'' Committee Chairman Henry Waxman, a California Democrat, said Greenspan had “the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.'' “You were advised to do so by many others,'' he told Greenspan. ``And now our whole economy is paying the price.'' Waxman and other lawmakers repeatedly interrupted Greenspan as he answered their questions, in contrast to deference to his testimony while he was Fed chairman, according to Bloomberg. Greenspan served as chairman of the Fed from 1987 to 2006.

Revver | October 24, 2008

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