Hubris and Humor: Alan Greenspan Criticizes Financial Reform

Clueless. Or Shameless. Take your pick. Those are the choices most commentators have offered for former US Federal Reserve Chair Alan Greenspan's criticism of the financial reforms proposed in the wake of the crisis and recession for which his policies are generally cited as a primary cause. Clueless because he may not understand how irresponsible this makes him look. Shameless because he may simply be shilling for his banking clients. There have been a torrent of comments. Paul Krugman's from the New York Times are repeated here because he employs humor:

"Alan Greenspan continues his efforts to cement his reputation as the worst ex-Fed chairman in history; in today’s FT, he comes out for a repeal of financial regulations designed to prevent a repeat of the crisis for which he, more than any other individual, bears personal responsibility.

To be honest, I didn’t know quite how to respond; I was, very nearly, left speechless by the lack of self-awareness on display. But Henry Farrell shows us the way, pointing out that Greenspan’s piece contains this remarkable passage:

Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.

Henry then asks readers to chime in with other uses of the “with notably rare exceptions” phrase. Among the entries:

With notably rare exceptions, Newt Gingrich is a loyal and faithful husband.

With notably rare exceptions, Japanese nuclear reactors have been secure from earthquakes.

Though unredeemably(sic) opaque, Mr. Madoff’s operations delivered excellent returns, with notably rare exceptions.

With notably rare exceptions, the levees protecting New Orleans have held fast in the face of major hurricanes.

With notably rare exceptions, locking all exits to the workplace is a harmless way to improve your employees’ productivity.

With notably rare exceptions, petroleum extraction has minimal environmental impact.