Greenspan - Putz

Of all the people who deserve to have their reputations permanently blackened by the Great Recession there is no more deserving candidate than Alan Greenspan, an ideologically blinded hack for the ages. The ultimate takedown of Greenspan's incompetence has yet to written but Reason magazine gives it a half-assed shot in their recent review of his book - 'The Map and the Territory' (even the title is a rip off). Notable quotes:

Greenspan never considers the possibility that his own actions contributed to the housing bubble and the ensuing financial collapse.

you can understand the “irrational exuberance” of the years preceding the crash of 2008 as a rational response to the Federal Reserve Bank’s artificially low interest rates. But not if you are Alan Greenspan, the man who chaired the Fed from 1987 to 2006.

He does not raise the possibility that the Fed’s expansionary policies had something to do with driving the inflation-adjusted federal funds rate—the rate that banks charge one another for short-term loans of reserves—below zero for almost two years.

Greenspan, like many behavioral economists, is quick to blame market actors for irrational choices rather than asking whether policy makers have distorted signals or incentives in ways that lead rational actors to bad outcomes.

Given Greenspan’s belief about the cause of lower interest rates, the only explanation he can offer for over-building is irrationality. He never seems to consider the alternative hypothesis, that the Fed might have turned all the lights green.