Thursday, April 10, 2008
GREENSPAN DOES A CYA - OR TRIES TO
WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economy was in recession, and said it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.
In an interview with CNBC television in which he defended his chairmanship of the U.S. central bank against charges that his policy missteps had laid the groundwork for the current crisis, Greenspan said Fed decisions on his watch were rationally constructed based on evidence at the time.
"I have no regrets on any of the Federal Reserve policies that we initiated back then because I think they were very professionally done," Greenspan said.
It is unfair to hold his Fed to task for the housing bubble or the current crisis in credit markets, because global market forces were at work to keep long-term interest rates low, not just Fed policies that brought short-term U.S. interest rates down to multi-decade lows, he said.
"Clearly, certain of our anticipations of what would happen as a consequence of those policies were off but there's no way of avoiding that," he said.
Read all of it.
This approval of government intervention to rescue our economy from this gigantic housing blunder is out of line with Libertarian beliefs. Apparently Libertarians only want to cling to the doctrine so long as the result of their beliefs doesn't turn into a financial fiasco. When it does, and they have egg on their face, they are all for government bailout. Isn't this a variety of "Having your cake and eating it"?
Now the only important question is how can I successfully apply this strategy to my household budget?
Thanks to Susanna for the link.