(C) Common Dreams
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Greenspan Admits ‘Flaw’ to Congress, Predicts More Economic Problems [1]
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Date: 2008-10-23 18:05:00-04:00
ALAN GREENSPAN:
So it strikes me that, if you go back and ask yourself how in the early years anybody could realistically make a judgment as to what was ultimately going to happen to subprime, I think you're asking more than anybody is capable of judging.
And we have this extraordinarily complex global economy, which as everybody now realizes is very difficult to forecast in any considerable detail.
And, Mr. Chairman, I know — I agree with you in the fact that there were a lot of people who raised issues about problems emerging, but there are always a lot of people raising issues, and half the time they're wrong. And the question is, what do you do?
I mean, you point out quite correctly that the Federal Reserve had as good an economic organization as exists, and I would say, in the world. If all those extraordinarily capable people were unable to foresee the development of this critical problem, which undoubtedly was the cause of the world problem with respect to mortgage-backed securities, I have to — I think we have to ask ourselves, why is that?
And the answer is that we're not smart enough as people. We just cannot see events that far in advance. And unless we can, it's very difficult to look back and say, why didn't we catch something?
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[1] Url:
https://www.pbs.org/newshour/show/greenspan-admits-flaw-to-congress-predicts-more-economic-problems
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