Greenspan could spot a bubble in real time. He called it a bubble the day it peaked. But he didn't see the housing bubble coming? Really?
Update: Ok, maybe Greenspan really didn't see the housing bubble coming. His record as Charles Keating's lobbyist isn't very good:
Neoclassical economists are not simply incorrect about financial regulation; they give the worst conceivable policy advice. Keating’s economists exemplify these points. Alan Greenspan claimed that Lincoln Savings posed no foreseeable risk of loss – it was the most expensive failure ($3.4 billion – which is hard to do when your S&L only has $6 billion it total (reported) assets). Greenspan and George Benston lauded 33 S&Ls that made large amounts of direct investments as the model for the industry and ridiculed the rule we adopted restricting direct investments (the rule that Keating tried to evade through massive forgeries). Within two years, all 33 S&L had failed. Most of them were accounting control frauds. It is impossible to do worse than zero for 33. Daniel Fischel claimed that his study showed that Lincoln Savings was the best S&L in the Nation – it was the worst. Economics cannot be done worse than Fischel did.Then the question may be why he was so bad. Ideology? If so, why does bitcoin not fit into his ideology?
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