The ever ironic former Fed Chairman Alan Greenspan on whether government intervention can create moral hazard:

“There were unintended consequences to almost every action I was involved in” as Fed chairman, said Mr. Greenspan, who himself cut interest rates to help stave off a bond-market crisis in 1998, and later was accused of helping inflate the stock bubble of the late 1990s. “If we anticipated the unintended consequences that were going to happen we might have changed the policy,” he said, but he added that it is impossible to forecast all the consequences of government action.

-WSJ August 29th, 2011

Please make it stop . . .

Category: Federal Reserve, Really, really bad calls, UnGuru

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

34 Responses to “QOTD: Alan Greenspan on Moral Hazard”

  1. toombsie says:

    I’ ve been reading the Financial Crisis Inquiry Commission’s report, which is actually really good (as long as you ignore the dissenting opinions in the back), and the many, many Greenspan quotes they put in there make one want to scream. How this guy can be taken seriously at all anymore, after he was so incredibly wrong?

  2. NervousRex says:

    Hmm. Signs of a burgeoning self-awareness.

    In an 85-year old!

    Too bad *we* had to pay for it.

  3. At least he is saying he was wrong…
    During the financial crisis he said a lot of bullsh*$.

  4. arthurcutten says:

    One thing we all should have learned by now is that the greatest moral hazard is taking anything this pathological liar says at face value.

    He is a symbol of this generation, amoral excess in the service of greed and the self.

  5. DeDude says:

    Now if you stop being an arrogant dumb ass and openly discuss plans for actions, encourage different opinions and listen to everybody’s opinions and arguments, then you do have a chance to predict all the unintended consequences and collateral damage of your final actions. You may decide to take the risk of certain adverse events for a greater common good, but if you acknowledge those risks then you are more likely to keep an eye on them and reverse course if they begin to appear as much bigger problems than you had hoped. Its called being a leader rather than an arrogant idiot.

  6. arthurcutten says:

    For those who have not been paying attention, Greenspan has played this spin several times before.

    He admits in passing that he might have been wrong. Oh humble me.

    And then he waits a few weeks and spins more of the same lies and deceptions he has been putting out there for thirty years. And he stand on his record unblemished and unashamed.

    He is a classic, unrepentant conman.

  7. Petey Wheatstraw says:

    Don’t we have an island somewhere that we can put these people on? Is exile really too harsh?

    The Intrigued Trader:

    How could he NOT have understood, at the time that he took them, that his actions would eventually have catastrophic consequences?

  8. lalaland says:

    I mean, macroeconomic policy is really like a kite – once you let go of the string you really never know which way it’s going to fly.

  9. franklin411 says:

    There are unintended consequences to doing nothing as well.

  10. RandyClayton says:

    There were plenty of people who in real time were projecting the consequences of post 9/11 ‘emergency low interest rate’ policies. It’s acceptable that not everyone could project the consequences, but the rest of us were reading and following those who could.

  11. Petey Wheatstraw says:



  12. carleric says:

    During the mania of 2000 I well remember all the folks who worshipped at the feet of the Maestro..and now all the naysayers are piling on…..look the man was, is and forever will be a damned fool. And now you have his clone running the Fed….good luck with that.

  13. MayorQuimby says:

    We need to build a 100 foot wall around DC, call it a prison and be done with it.

  14. louis says:

    Major conspirator of the mess we will have to unwind for years.

  15. DC says:

    Re: Quotes of the Day. More Golas, less Greenspan. I was not familiar with Golas until today so thanks for the introduction.

    Whether I can fully fathom Golas or not, I’m pretty sure I’ll get a lot more out of this life by reading his work, and by completely ignoring the feeble excuses of the media-appointed, now discredited “Maestro.”

    I do hope you’re compiling the QOTDs. They’d make a great standalone subsection.

  16. TrentHawk says:

    Umm, maybe find something else to discuss..please…any day now

  17. AHodge says:

    there were inintended consequences of appointing him
    and letting him stay around

  18. Concerned Neighbour says:

    The man has been discredited and shamed. The one thing I can respect him for is admitting he was wrong (although it came about 50 years too late).

    Yet his (former?) ideology is booming (regulation is bad, taxes are bad, free money forever, etc.). Pretty soon we may no longer have any environmental protection (multiple legitimiate contenders for the Republic nomination want to “padlock” the EPA), further de-regulation of the banks, and the list goes on. Scary stuff.

  19. DSS10 says:

    He still is an arrogant Fnck. I like to use of the royal “we” in his statement. I bet he sleeps well at night too….

  20. EdDunkle says:

    He’s got a bit of Donald Rumsfeld in him. Is he talking about “known unknowns” or “unknown unknowns?”

  21. AHodge says:

    i would call him more unknowingly hilarious than ironic
    but thats just a word use nitpick

  22. taninvest says:

    why does the WSJ still interview the senile old fart (or fcuk)??

  23. orvil tootenbacher says:

    Thanks, Al, for more of the condescending double-talk. I speak for many when I say Greenspan’s arrogance and over-confidence in his judgement have created unbelievable pain for so many.

    Who’s with me with these suggestions for Mr. G:

    1) STFU
    2) Go away.

  24. AHodge says:

    honestly the only thing that annoys me is the airtime the delusional old fool gets, he is not even doing decent macro data anymore
    people should take better care of their elderly….
    and the media should know better
    this circus is like jerry springer for the senile

  25. StatArb says:

    Too bad that today’s leadership won’t admit to any mistakes and takes no blame for anything ….

    just whistling past the graveyard of 9%+ unemployment and $4 trillion in added debt

  26. OK Avenger says:

    Alan Greenspan: AGEnt OF TURBULENCE

  27. DSS10 says:

    Some Greenspan trivia from wikipedia…….

    In 1977, Greenspan obtained a Ph.D. degree in economics from New York University. His dissertation is not available from the university[7] since it was removed at Greenspan’s request in 1987, when he became Chairman of the Federal Reserve Board. However, a single copy has been found, and the ‘introduction includes a discussion of soaring housing prices and their effect on consumer spending; it even anticipates a bursting housing bubble’.

  28. MikeG says:

    Shorter Greenspin:
    When I made decisions that would keep me on the invite list for great DC cocktail parties, I pretended not to notice the utterly predictable adverse consequences. Acting stupidly-oblivious and resolute was a great career strategy especially under the Bush regime.

  29. MikeG says:

    How could he NOT have understood, at the time that he took them, that his actions would eventually have catastrophic consequences?

    “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” — Upton Sinclair

  30. AHodge says:

    really Andrea should wipe his lips in public
    and keep him from wandering into studios–esp WSJ
    or did she split?

  31. Frilton Miedman says:

    We’ve been afforded the “opportunity” to sort the wheat from the chaff on Austrian, Monetarism and Keynes.

    With the price being a “mere” downgrade to third world status for the benefit of “wealth creation” for the minority 1% who have the most “campaign funds”, what a deal!

  32. herewegoagain says:

    “…later was accused of helping inflate the stock bubble of the late 1990s.”

    Haven’t we passed the accusation phase, and the intellectually honest now regard it as an indisputable fact?

    Is there any one person haunting the world more responsible?

  33. philipat says:

    Why does anyone still listen to and/or quote Greenspan?

  34. cyaker says:

    philipat is that a rhetorical question? The same people who missed the crises and the same people who claimed that Saddam had WMD keep going and going like thte Eveready Bunny while those who warned us in both case WI e exception of Barry are never seen or heard.