It's great to know that Alan Greenspan recognizes a financial crisis when he sees one. Speaking about the mess that began with the collapse of the subprime-mortgage market and that's now highlighted by the demise of Lehman Brothers, the sale of Merrill Lynch and the woes of AIG, he informs us that this is a big one, "probably a once in a century event'', that will likely include the failure of more big financial firms. "There's no question that this is in the process of outstripping anything I've seen, and it is still not resolved," he assures us.
Seems to me that Greenspan should be more than a Monday morning quarterback. Such as... responsible in part for our current problems. Didn't he help inflate the housing bubble by supporting too-low short-term rates for too long? Greenspan has said the problem lay not in the loans, but in their repackaging as securities and subsequent sale to investors, but c'mon. Why couldn't he see that the policies that encouraged reckless lending would come to roost somewhere up the Wall Street food chain?
I'm increasingly disappointed in our "experts," from Wall Street to the White House, on the election trail and beyond.
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