If you missed Former Fed Chairman Alan Greenspan’s incredible admission today, here it is. In a stunning statement, he said that much of his previous faith in free markets had been wrong: "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.” He further called this mistake "a flaw in the model … that defines how the world works." Let’s hope that policymakers still in office agree.
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2 responses to “Greenspan Admits “Mistake””
Greenspan failed to recognize that some percentage of executives and management in business is morally corrupt (or corruptible).
His turning a blind eye to the collateral damage being inflicted on consumers is evidence he simply believed that the leadership of financial institutions would always operate honorably and wouldn’t tolerate the malfeasance of subordinates.
Apparently he was completely insulated or he was willing to accept the collateral damage being inflicted on borrowers. Now that shareholders and the entire economy are at risk, he is suddenly shocked.
I just don’t buy it. If an executive would allow widespread abuse of consumers, why would Greenspan trust him or her to protect shareholders?
I believe a truer description of Alan Greenspan’s remark is a mere passing of the buck, not an admission of any sort of mistake or misdeed on his part.This is standard Greenspeak.