So Alan Greenspan, former Fed chairman and arguably one of the chief architects of the financial crisis we find ourselves in today, finally acknowledges that he “made a mistake” in rebuffing all attempts to regulate the derivatives market. He said today:
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”
Mr Greenspan — may I call you Al? — I have a little bit of news for you. Banks are not people. They don’t have brains, or consciences, or any sense of self-interest.Â As it turns out, banks are actually run by people.Â Collections of individual people, in fact, each whom often have a very well-developed sense of self interest. As in, an interest in themselves, not the bank as a whole. And unsurprisingly, Al, many of them saw an opportunity to do well by themselves, even if it conflicted with the long-term goals of the bank, or even the economy as a whole. As an S&P employee said to a coworker in 2006:
“Let’s hope we are all wealthy and retired by the time this house of cards falters.”
So let’s not anthropomorphize any more financial institutions, eh Al?
One thought on “Alan Greenspan is an idiot”
So, I guess this means that my pet hedgefund is really dead and I should bury it in the backyard?
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