(Originally published at amahchewahwah)
Alan Greenspan had the gall to sit before Congress today and claim that he was in "a state of shocked disbelief" when confronted with the undeniable evidence that every idea he ever had is wrong. His whole world has just crumbled before his eyes and he has been forced to watch as his castles made of sand slip into the sea.
From the "librul" New York Times:
Facing a firing line of questions from Washington lawmakers, Alan Greenspan, the former Federal Reserve chairman once considered the infallible maestro of the financial system, admitted on Thursday that he "made a mistake" in trusting that free markets could regulate themselves without government oversight.
A fervent proponent of deregulation during his 18-year tenure at the Fed’s helm, Mr. Greenspan has faced mounting criticism this year for having refused to consider cracking down on credit derivatives, an unchecked market whose excesses partly led to the current financial crisis.
We are watching the invalidation of the main tenets of conservative economic philosophy and if it wasn't so tragic and offensive I'd be tempted to have me a big ole' slice of that yummy, yummy Schadenfreude Pie. But this is no joke, and the damage will be too severe to joke about this anymore.
But in a tense exchange with Representative Henry A. Waxman, the California Democrat who is chairman of the committee, Mr. Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Mr. Greenspan said.
Referring to his free-market ideology, Mr. Greenspan added: "I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact."
Mr. Waxman pressed the former Fed chair to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Mr. Waxman said.
"Absolutely, precisely," Mr. Greenspan replied. "You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."
In his prepared remarks, Mr. Greenspan said he was in "a state of shocked disbelief" about the breakdown in the ability of banks to regulate themselves. He also warned about the economic consequences of the crisis, saying that he "cannot see how we will avoid a significant rise in layoffs and unemployment." Consumer spending will decline, too, he said, adding that a stabilization of home prices would be necessary to bring the crisis to its end.
I find it interesting that every time there is a major crisis on the Republican watch, it's rooted in something that we "could never have anticipated". 9/11, Katrina, and now we can add financial malfeasance, greed, and corruption to that list.
Now that's what my Russian grandma would have called "chutzpah".