Oops

With the economy in crisis, with financial markets cratering, with government bailouts mounting to more than $1 trillion, Alan Greenspan, the former Federal Reserve chairman and fervent foe of government regulation once hailed by adoring corporate media as the maestro, slipped Thursday into the familiar spotlight as the star witness at a congressional hearing to allow that he was "partially" wrong. Greenspan even conceded that he "made a mistake." "After years of confrontation about the role o

With the economy in crisis, with financial markets cratering, with government bailouts mounting to more than $1 trillion, Alan Greenspan, the former Federal Reserve chairman and fervent foe of government regulation once hailed by adoring corporate media as the maestro, slipped Thursday into the familiar spotlight as the star witness at a congressional hearing to allow that he was "partially" wrong. Greenspan even conceded that he "made a mistake." "After years of confrontation about the role of government regulation, I'm glad to see he now recognizes that his ideas are flawed," said Senator Bernie Sanders.

Sanders, a member of the House Banking Committee during Greenspan's 18-year tenure running the Fed, frequently sparred with the right wing economist who advocated deregulation of markets, unfettered free trade, abolition of the minimum wage and tax breaks for millionaires.

At a hearing in 2000 on the merger boom, Sanders pointedly asked Greenspan. "Aren't you concerned with such a growing concentration of wealth that if one of these huge institutions fails that it will have a horrendous impact on the national and global economy?" "No," Greenspan replied dismissively. "I'm not."

"What amazed me," Sanders recalled recently, "was the kind of overblown respect not only Republicans had for Greenspan, but Democrats as well. They rolled out the red carpet for him."

Facing questions on Thursday from a by now more skeptical congressional panel, Greenspan admitted that he "made a mistake" in trusting that free markets could regulate themselves without government oversight. In light of the economic crisis he helped bring about, the former chairman said he has reconsidered his once unflinching opposition to government regulation and unwillingness to crack down on what Wall Street calls credit derivatives, the reckless investment instruments that helped drive an unchecked market to the current financial brink.

Greenspan told the House Committee of Government Oversight and Reform that he was "partially" wrong in not having tried to regulate so-called credit default swaps. "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 said.

Referring to his once unquestioned faith in an unregulated free market, Greenspan admitted, "I have found a flaw. I don't know how significant or permanent it is, but I have been very distressed by that fact."