“Much intervention turns out to hobble markets rather than enhancing them” Alan Greenspan, former Federal Reserve Chairman
Bloomberg is reporting today that Alan Greenspan has indicated a surge in government “activism” is hampering economic recovery (story here). One wonders when this new revelation came to Mr. Greenspan – who certainly didn’t mind intervention and activism on his part when he was chairman of the Federal Reserve. I haven’t heard a mea culpa from Greenspan, indicating that his intervention in the market caused the housing bubble and subsequent crash.
The story contains this nice whopper: “Greenspan’s conclusions fit with his long-held free-market ideology” – oh my, this begs all sorts of questions. What exactly do we mean by “free-market ideology” or, for that matter “long-held”? In a free market, the federal reserve doesn’t intervene to force rates in one way or another, inflating the value of the currency and blowing asset bubbles (in the recent case, the housing market). Rather, freedom, and individual choice and preference drives the market, including interest rates. Perhaps Mr. Greenspan has seen the light and has become a free-marketer; but this would mean that “long held” means “for the past few days and weeks since his conversion” … I doubt it. I suspect instead Greenspan believes in the free market when other people are intervening, but is fully confident in his own omniscience to make the right decisions with his own intervention.
Maybe he actually believes he’s a free-marketer. I guess folks will believe all manner of things about themselves when it’s convenient.