Former Fed Chairman Alan Greenspan is travelling the world telling anyone who will listen that he is NOT to blame for our current woes and that all those who say otherwise are nasty and unfair (In case you missed it, our government and financial intelligentsia have conveniently decided that Greenspan is responsible for all of today’s economic and monetary problems).
How’s Greenspan’s “don’t blame me” tour going? Let’s be the judge.
But first, an overview of the alleged failings that Greenspan is trying to deny responsibility for:
- An easy-money policy that contributed to the stock and housing bubbles and runaway inflation.
- A convenient inability to spot “bubbles” until they had burst (when he couldn’t be blamed for bursting them).
- A blessing of the adjustable-rate mortgages that have now hosed so many homeowners.
- An assessment that the housing market was just seeing “a bit of froth” when in fact it was experiencing a nationwide disaster in the making.
- An insistence that Wall Street derivatives and sub-prime mortgages shouldn’t be regulated, a policy that arguably contributed to the current credit crisis and collapse of Bear Stearns.
Does Greenspan deserve all the criticism he’s been getting? Of course not. This is not a command-and-control economy, and lost in the scapegoating are the consequences that Greenspan’s policies arguably helped avoid (such as economic collapse, deflation, etc.) Does Greenspan deserve SOME criticism? Absolutely. In hindsight, some of his policies and decisions were dumb, and he should have been much quicker to admit this.
But on to the “Don’t Blame Me” tour…
Alan, grow a thicker skin already. Of course politicians are going to blame you–that’s what politicians do. Of course your critics are going to be brilliant in hindsight. Of course those who were formerly lionized will be transformed into scapegoats. WHATEVER.
You held one of the most important and powerful jobs in the country for nearly two decades. Over most of that period, the country experienced solid growth, low inflation, and solid markets. You made your choices, and you did your job–and, overall–many people would argue that you did it well.
So stop the point-by-point rebuttals. Just smile, acknowledge that if you had it to do all over again you might do some things differently (who wouldn’t?), and remain statesman-like and above the fray. Otherwise, even your die-hard fans will soon be scratching their heads and saying, “methinks he doth protest too much.”
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