Arnold Kling:I am shocked at the behavior of my fellow economists during this crisis. They are claiming to know much more than they do about causes and solutions. Rather than trying to understand and explain what is going on, they are engaged in a fierce battle over narrative.
Does this describe
Greenspan yesterday? His remarks were very disappointing to hear and in my opinion completely wrong-headed. They help undermine public confidence lower than it already is and presumes that he knows the root of the problem. (I don't think anyone has a full understanding yet.) Like
Bush's speech and
Pelosi's partisan rant, I find Greenspan's comments both irresponsible and troubling.
Arnold Kling:
1 comment:
I am glad that Greenspan at least admitted that he had made a mistake.
And his remarks were obvious; totally unregulated markets lead to excesses that eventually collapse those markets.
Again, I don't see what the controversy is. I believe in a free civil society, yet recognize the needs for laws, a police force, and a court system. Without those a free society collapses into anarchy, which would lead to a total police state.
It's the same with the economy; we need free markets, not wild markets.
That's not an indictment of capitalism, it's the facing of realities of human nature that will save capitalism.
As for undermining public confidence, I don't think it can be undermined any further by Greenspan's remarks. Reality is doing a far better job at that.
Plus, many people don't know who Greenspan is, or don't particularly care what he says.
For those who do care, his candor is more reassuring than just trying to pretend otherwise.
Ironically, if some level of regulatory oversight had been instituted a few years ago we wouldn't be in a situation where far more govt involvement is being realized.
Think about it: the apostles of unfettered free markets have led us to a situation where massive govt bailouts are necessary, and where banking and insurance companies are being partially nationalized.
One extreme leads to the other.
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