Greenspan defends his legacy.

Once it appeared that Greenspan wrapped up his legendary career when his autobiography “the age of turbulence” published. Whereas now the ripple effect of the subprime crisis now second-guessed his previous shing 18 years as the chairman of federal reserve bank.
(Quoted from WSJ)
The prevailing view among critics faults Mr. Greenspan on two main counts

First, they say, his Fed lowered rates too much from 2001 to 2003 to cushion the economy from the bursting dotcom bubble. Then it took too long to raise them again. Low rates fueled mortgage borrowing, driving home prices to unsustainable heights.

Second, they say, the Fed was lax in its regulatory role. The central bank failed to press for stiffer rules for underwriting mortgages to people who ultimately couldn't afford them, they say. Also, they say, the Fed failed to anticipate banks' exposure to risky home buyers, leaving them with too little capital to absorb the eventual losses on those mortgages.

(Unquote)

I don’t want to judge who is wrong and who is right here. However, what rankles me is that whenever there is a trobule, some people (especially people always speak more than do) will play the blame game and ride on the critics. Hindsight is easy to pick but what these guys were doing when the decision was made back then. What makes me even furious is that many Greenspan’s peers now are also pouring their anti-Greenspan rhetorics. The question is why they didn’t not use their wisdom to challenge Greenspan back then ?.

Greenspan says “I was praised for things I didn't do, I am now being blamed for things that I didn't do." Even the agruement is right, Greenspan did lax to make those decision who probably led to this credit crisis. But who can gurantee that if Grennspan proposed something else, the economic condition will be better rather than worse?

Greenspan endorses laissez-faire regulatory oversight. I agree with him. I don’t believe heavy-handed government relation can eradiate financial or economic risks, if not make them higher. Market has its own self-correction mechanism, which is beyond human-being’s meddling. The history proves it in the past, and it will do now and in the future. What government should do is to ensure the play in the market is compliant with the rule.