I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.
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 . . . This crisis, however, has turned out to be much broader than anything I could have imagined.
If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,” Greenspan said. “Forecasting never gets to the point where it is 100 percent accurate.”
Meanwhile, while Mr. Andrea Mitchell ponders his navel, Alex Tabarrok, Tyler Cowen and the others over at Marginal Revolutions have a lively and interesting conversation about ‘The 4 Myths Of The Credit Crisis.’ Alex expressed skepticism about the stampede for a massive bailout from the beginning. Three economists from the research department of the Federal Reserve Bank of Minneapolis offered what they claim is empirical evidence that the ‘Wall Street Crisis’ never really threatened the ‘real economy.’ For a pithy take down of that report, here.
As far as the Stiftung knows, no one in the above exchanges has any ties to or experience with the plumbing industry.