Back in November 2007, when Alan Greenspan was running around promoting his book, the Age of Turbulence, his kudos was high and standing was great. It was just a year after leaving office and subprime had hit, but folks thought it was just a $300 billion hole … a mere drop in the ocean.
I heard him speak on the public stage back then, and he made many points all of which came back to : "it's not my fault".
Now the crisis is a lot bigger with trillions of dollars involved, and many blame Alan Greenspan for it. For example:
In particular, Alan Greenspan was a fan of the free market system and loose self-regulation, as well as a staunch defender of the use of leverage and derivatives to fuel commerce. He now recognises that there was a flaw in that approach, although some would say he could concede such a point when he has made millions out of the free market system personally.
For example, after leaving office, three firms – Deutsche Bank, Hedge Fund Paulson & Co and bond investment company Pacific Investment Management (PIMCO) – hired Alan Greenspan as an adviser on economic issues and monetary policy. Paulson & Co is known for its record $3.7 billion profit making out of the credit crisis, some of which must have flown the Greenspan way.
With Alan Greenspan's bubble burst, everyone now lays the blame at his feet. This is clearly demonstrated by the media and online rants and raves, with the latest to prompt such outcry coming from two UK newspapers that ran a poll this week to find out who we all think is to blame for this crisis. Alan Greenspan comes out #1 in both.
The Guardian gives him 31.9% of their public vote, George W. Bush gets 16.7% and Gordon Brown 14.1%. Fourth place went to the American Public … doh!
In a similar poll in the Times, Greenspan comes first with 31.2% and Gordon Brown comes second with 20.8%, whilst George W. gets 16.7%.
Equally, in a USA Poll by Institutional Investor, those who should know, 53% blame Greenspan, 28% Geroge W. Bush and, interestingly, 16% Bill Clinton.
What such polls serve to achieve I have no idea, but it does show that Mr. Greenspan might be advised to avoid walking down the street on his own at night for a while.