Can Greenspan Be Retroactively Impeached As Fed Chair?

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Monday, 21 October 2013 13:29

That's what readers of this AP interview with Greenspan must be asking. Greenspan was asked about the crisis caused by the collapse of the housing bubble (inaccurately referred to in the interview as the "financial crisis). He responded by saying:

"A: The problem is that we didn't know about it [the growth of the subprime market]. It was a big surprise to me how big the subprime market had gotten by 2005. I was told very little of the problems were under Fed supervision. But still, if we had seen something big, we would have made a big fuss about it. But we didn't. We were wrong. Could we have caught it? I don't know."

The correct response from the interviewer should have been an astonished, "you are claiming that you did not know of the enormous growth of the subprime market by 2005? It was widely talked about in the business press and documented in a number of different data series. How could the Fed chair possibly have missed the explosion of exotic mortgages?"

It is preposterous that Greenspan would make such a claim. Everyone who was paying any attention to the housing market was joking about the proliferation of "NINJA" loans, which meant no income, no jobs, no assets. The Fed chair really didn't have a clue of this?

His professed ignorance on this topic is astounding. If he really missed the flood of bad mortgages that was propelling the unprecedented rise in house prices then he was not doing his job. He should repay the taxpayers his salary for these years, he obviously did not work for it.