Greenspan: Time to Assess Blame

It's Greenspans fault and he's on the defense in the FT. Even the NYTimes is taking on the sacred cow.

Greenspan's basic argument relies on the art of distraction. He will tell you that he can prove his monetary policy did not cause the crisis while completely ignoring or lying about the regulatory failure and total banking capture of the Fed. Greenspan's apologia pro vita sua in the FT is alarming. He led the retrograde move on Wall Street away from exchange traded instruments to OTC. He called these OTC instruments "innovation" and told Congress not to regulate. This took the US trading markets back to pre-1929 regulation and increased system wide risk.

Thus, Greenspan only wants to discuss monetary policy models, he engages in the fallacy of distraction from the real failure.

If commercial banks and ERISA funds were required to invest in SEC regulated exchange traded instruments, for example, this crisis might have been avoided.