The NYT is making it sound like Greenspan is contrite and a believer in regulation now that he's witnessed the epic fail he helped put in motion. I'm getting a different vibe from CNN, which quotes the great man saying something else:
Greenspan said that whatever regulatory changes are made to respond to the crisis, "they will pale in comparison to the change already evident in today's markets."
He said that markets "will be far more restrained than would any currently contemplated new regulatory regime."
"Investors, chastened, will be exceptionally cautious," he added.
Clearly, Greenspan did the obligatory public confession - forced to condemn, in the words of Rep. Waxman, his "world" and "ideology," but I wouldn't get too excited about seeing a wave of real reform hit the financial sector. We don't need it, you see, because the markets, run by Greenspan's mythical professionals who know what they're doing, have now learned their lesson. Until next time, that is.
This is just like when I was a kid and my brother and I would fight. One of us would get hit too hard and then threaten to tell my mom. The other one would invariably panic, apologize profusely and offer to hit him/herself just as hard. That sort of reasoning couldn't fool eight-year olds. It shouldn't fool us now.
Naomi Klein has the right idea:
Watch the other four parts at You Tube or the entire speech at Democracy Now!.
UPDATE: Dean Baker reminds us that Greenspan and his gang wear the Free Market label but don't want to actually, you know, operate in any market that doesn't socialize the risk and privatize the profit.
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