Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to recognize early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy.It's too bad I wasn't running the Fed for the last six years, or some randomly chosed grocery clerk or waitress, since anybody with half a brain could have figured out that something like this would happen.
In an interview, Greenspan said he was aware of "subprime" lending practices where homebuyers got very low initial rates only to see them jacked up later, causing severe payment shock. But he said he didn't initially realize the harm they could do.
Friday, September 14, 2007
The obvious vs. the oblivious
I am an admitted economic idiot, which is probably part of my fascination with marketeers -- I can't help feeling that they must be privy to some secret knowledge that I can't quite grasp. But, despite that, I apparently am a more astute economist than Alan Greenspan: