Sunday, November 16, 2008

Greenspan admits he was wrong

This is old news by now, but in congressional testimony, Greenspan admitted to a "flaw" in his belief in deregulation. Amazing.

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

On a day that brought more bad news about rising home foreclosures and slumping employment, Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken.

I'd say that he came pretty late to that realization. I know the average American tends to blithely give credence to American leaders when they talk about the glories of free market capitalism. We've even had most of our Democratic leaders buying into the idea that as little regulation as possible is the most beneficial to the economy. Unfortunately, those few brave voices who said otherwise couldn't convince people of that when everybody was starry-eyed from the apparently booming economy. I say apparently because as you've learned by now, all that growth was based on fake money. I've never believed in the kind of deregulation those free-marketers tout. I mean, even with nothing but the examples of elecricity and tuition deregulation here in Texas, we can see that that kind of deregulation is a disaster. We pay above US average rates for electricity and have suffered from a 53% increase in tuition since deregulation.

Ah, but is there a valid defense in claiming that it was impossible to foresee this economic train wreck coming? Uh, not really. Paul Krugman pretty much got it right on.

Of course, some people still deny that there's a housing bubble. Let me explain how we know that they're wrong.

That column was from August 2005. Of course, there were many who derided him at the time, namely nitwits like those at Powerline.

Well, take whatever lesson you want from this post. Just don't forget next time to listen to people who refuse to admit that the world is approaching perfection and we're about to enter utopia.

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