The Audacity of Alan Greenspan

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Ben Cohen
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Having largely disappeared into semi retirement, Alan Greenspan is now offering his thoughts to 'International Finance' on new financial regulation that he sees as hampering economic growth in the future. Writes Greenspan:

The current government activism is hampering what should be a broad-based robust economic recovery, driven in significant part by the positive wealth effect of a buoyant U.S. and global stock market.

In other words - government regulation bad, free market good.

Does Greenspan have no shame?

If you have any understanding of the financial crisis that hit the world in 2008, you probably know that former head of the Federal Reserve had his finger prints all over it.

A militant free marketer, Greenspan believed in deregulation at all costs and helped engineer the wholesale deconstruction of governmental regulatory apparatus over a 20 year period. Greenspan presided over bubble after bubble after bubble, jumping in with tax payers money to bail out his rich friends when they burst, setting the scene for more financial mayhem in the future. The final result of the Greenspan economy was a catastrophic crash that almost destroyed the world economy in a matter of weeks. The free market environment Greenspan had helped to created imploded due to lack of serious regulation, wiping $6.9 trillion off the stock market in a matter of months.

So severe was the crisis that the supremely confident Greenspan admitted at a Congressional hearing that there was a 'flaw' in his ideology - a startling revelation given his life long dedication to Libertarianism. It appears that Greenspan has got his confidence back and is offering more free market solutions to a crisis caused by free market solutions.

It would be nice to say that the world has moved on from the provably bankrupt ideology, but given the economic team around President Obama, people like Greenspan unfortunately hold considerable power.

Greenspan has the right to offer his opinion on economics, but given his track record, no one should be listening.