News, Greenspan admits he doesn't understand the banking system (polls, accuse, rating)

[ParkTwain]

Greenspan testified yesterday before Rep. Waxman's House Oversight Committee. So, the nation's chief banker for 18 years doesn't understand why bankers did what they did. That's kind of like being a bus driver and not driving carefully and defensively. He should be erring on the side of conservatism in guiding the nation's financial system.

Now, are the conservatives beginning to understand why the majority of Americans has learned the hard way not to place so much faith in "free markets"? The Repub Party as a whole deserves to be wiped out at the polls in the next national elections.

US working on plan to help homeowners refinance - Yahoo! News (http://news.yahoo.com/s/ap/20081023/ap_on_bi_ge/financial_meltdown - broken link)

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Accused of contributing to the meltdown, but denying that it was his fault, Greenspan told a House panel the crisis left him — an unabashed free-market advocate — in a "state of shocked disbelief."

The longtime Fed chief acknowledged under questioning that 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 it "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."
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"The list of regulatory mistakes and misjudgments is long," Waxman said of oversight by the Fed and other federal regulators.

"My question for you is simple," Waxman told Greenspan. "Were you wrong?"

"Well, partially," Greenspan said.

But he went on to assign the blame on soaring mortgage foreclosures on overeager investors who did not properly take into account the threats that would be posed once home prices stopped surging upward.

He said what had been "a critical pillar to market competition and free markets did break down. And I think that, as I said, shocked me. I still do not fully understand why it happened."
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