Alan Greenspan claims that the free market failed to prevent the financial crisis and that he is “shocked” that his professed “free-market ideology” turned out to contain a “flaw.”
But why should we take him seriously? Greenspan, while once associated with laissez-faire philosopher Ayn Rand, hasn’t advocated genuinely free markets for decades. Remember, this is a man who for two decades reveled in being, as The New York Times put it, “the infallible maestro of the financial system.”
Free markets don’t have “infallible maestros.” They liberate us from such “maestros” — the central planners who have time and again falsely claimed the ability and the right to orchestrate millions of economic lives. . . .
Observe Greenspan’s 1966 analysis of the boom preceding the 1929 crash: “The excess credit which the Fed pumped into the economy spilled over into the stock market — triggering a fantastic speculative boom.”
Sound familiar?
What would that Greenspan identify as the cause of the speculative housing boom at the center of today’s crisis, the market or the maestro?
Greenspan is entitled to change his mind, of course. But it is intellectually dishonest to pretend that the market he manipulated for 20 years was genuinely free. And those questioning Greenspan’s actions as Fed chief should not be asking him what he didn’t do to prevent the financial crisis; they should be asking what he did do to cause the crisis by using his enormous power to reward irrational behavior. (Read more from pittsburghlive.com)
It is very important we win this debate. The crisis has NOT been cause by free markets. It was caused by government interference.