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Greenspan Concedes to `Flaw’ in His Market Ideology
Scott Lanman and Steve Matthews, Bloomberg
Former Federal Reserve Chairman Alan Greenspan said 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 grilling from the House Committee on Oversight and Government Reform. “That is precisely the reason I was shocked 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.
“We cannot expect perfection in any area where forecasting is required,” he said. “We have to do our best but not expect infallibility or omniscience.”
… The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that “private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.”
(23 October 2008)
Related:
From the BBC – Financial crisis ‘like a tsunami’
From NY Times – Greenspan Concedes Error on Regulation
Wall Street’s ‘Disaster Capitalism for Dummies’
Paul B. Farrell, MarketWatch
14 reasons Main Street loses big while Wall Street sabotages democracy
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Yes, we’re dummies. You. Me. All 300 million of us. Clueless. We should be ashamed. We’re obsessed about the slogans and rituals of “democracy,” distracted by the campaign, polls, debates, rhetoric, half-truths and outright lies. McCain? Obama? Sorry to pop your bubble folks, but it no longer matters who’s president.
Why? The real “game changer” already happened. Democracy has been replaced by Wall Street’s new “disaster capitalism.” That’s the big game-changer historians will remember about 2008, masterminded by Wall Street’s ultimate “Trojan Horse,” Hank Paulson. Imagine: Greed, arrogance and incompetence create a massive bubble, cost trillions, and still Wall Street comes out smelling like roses, richer and more powerful!
Yes, we’re idiots: While distracted by the “illusion of democracy” in the endless campaign, Congress surrendered the powers we entrusted to it with very little fight. Congress simply handed over voting power and the keys to trillions in the Treasury to Wall Street’s new “Disaster Capitalists” who now control “democracy.”
Why did this happen? We’re in denial, clueless wimps, that’s why. We let it happen. In one generation America has been transformed from a democracy into a strange new form of government, “Disaster Capitalism.” Here’s how it happened:
(20 October 2008)
What’s surprising is that this indictment of capitalism is coming from a long-time financial columnist writing for MarketWatch. -BA
British Marxist historian Eric Hobsbawm, “arguably our greatest living historian” (audio)
Today, BBC
Is the intellectual opinion of capitalism changing? British Marxist historian Eric Hobsbawm, “arguably our greatest living historian” according to the New York Review, discusses the current economic crisis and the problems with a free market economy.
(18 October 2008)
