Greenspan Admits Mistake. Will Only Cost Trillions

The first of many trillion dollar mistakes from the Bush years. I like the way he uses a natural disaster term to describe man-made disasters.

Former Federal Reserve Chairman Alan Greenspan, describing the current financial crisis as a “once-in-a-century credit tsunami” acknowledged Thursday that the crisis has exposed flaws in his thinking and in the workings of the free-market system.

Greenspan told the House Oversight Committee that his belief that banks would be more prudent in their lending practices because of the need to protect their stockholders had been proven wrong by the current crisis. He called this a “mistake” in his views and said he had been shocked by that.

Greenspan said he had made a “mistake” in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions.

Greenspan called this “a flaw in the model that I perceived is the critical functioning structure that defines how the world works.”

via 1115.org:

"If I’m not mistaken, Alan Greenspan, High Lord of the Free Market Worshipers, just admitted that unrestrained capitalism doesn’t really work. Kind of a big deal when regulation and accusations of socialism are being bandied about in a Presidential election."

Source: 1115.org