DEAR ALAN GREENSPAN, PLEASE STOP TALKING…. Not content with being discredited, former Fed Chairman Alan Greenspan is apparently determined to become a laughingstock.
This week, Greenspan, who’s already acknowledged how spectacularly wrong he was about regulation of the financial industry — a mistake that nearly collapsed the global economy — has a new argument to share. In the Financial Times, the former “Maestro” argues that Congress should just go ahead and repeal all those pesky safeguards intended to prevent the next disaster.
Henry Farrell flagged this gem from Greenspan’s piece:
Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.
“Notably rare exceptions” immediately becomes a contender for Ridiculous Phrase of the Year. Farrell calls it “a carefully-thought-out bid for Internet immortality,” adding, “It has the sublime combination of supreme self-confidence and utter cluelessness of previously successful memes such as ‘I am aware of all Internet traditions’ and the ‘argument that has never been made in such detail or with such care,’ but with added Greenspanny goodness.”
Felix Salmon put it this way: “Greenspan could hardly have made himself look like more of an idiot if he’d tried, not only because the ‘notably rare exceptions’ construction is so inherently snarkworthy, but also because it’s so boneheadedly stupid. Anything which normally makes money is a good idea if you ignore the times that it doesn’t work.”
And Alex Eichler added, simply, “Everyone is laughing at Alan Greenspan today.”
As well they should. What’s most striking to me about this is the delusional lack of self-awareness. Greenspan thought he knew he was doing, but was spectacularly wrong. The results were catastrophic, with a crisis we’re still struggling to resolve. (The efficacy of the response would be greatly improved were it not for policymakers who still think like Greenspan.)
For him to pipe up now, complaining two weeks ago about Obama administration “activism” and this week about Dodd-Frank financial regulation, is evidence that Greenspan still thinks he has credibility and opinions the rest of us should take seriously.
It was Greenspan’s incompetence, negligence, and ridiculous ideology that brought the global economy to its knees. At this point, he should hope that the world simply ignores him, and chooses to forgive his role in a failure for the ages. That can’t happen so long as Greenspan keeps whining publicly, pretending to know what he’s talking about.