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Greenspan Supports the Consumer Financial Protection Agency.
You may remember Alan Greenspan as the Ayn Rand-loving Fed Chair whose free-marketeering approach to central banking helped unleash asset bubbles and the original Too Big To Fail problem, the Greenspan put. Last fall, he even accepted some blame for all that, explaining that his ideology failed him. Now, he's saying something else that should also be obvious:
Greenspan said in an interview that he did not think the Fed was suited to policing lending abuses because of its focus on broader issues, but he added, "I'm not sure anyone could have done it better." He said the administration's plan to create a consumer protection agency was "probably the right decision."
The Fed has in fact done a terrible job policing consumer finance, and a new agency with that task as its number one priority is needed. While I don't expect the financial interests opposing the CFPA are going to come around on Greenspan's say-so, his statement does help disarm their exaggerations about unnecessary government interference. If Greenspan can admit it that more regulation is necessary, and Richard Posner can become a Keynesian, then everyone should be able to reconsider their biases in the wake of the crisis. Especially the people who caused it.
(Incidentally, this whole story on the Fed's failure to regulate consumer lending is worth a read.)
-- Tim Fernholz
COMMENTS (3)
No, but I remember the Alan Greenspan who sold out capitalism and Ayn Rand long before he joined the Fed in 1987. Capitalists want to abolish the Fed, not run it. You don't seem to know what Ayn Rand advocated, or what policies laissez-faire capitalism consists of.
The credit crisis was caused by the loose credit that was enabled by government influences: http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html
Posted by: Jeff Montgomery | September 28, 2009 10:03 PM
Does more government control and less consumer choice sound familiar? The Consumer Financial Protection Agency (CFPA) is a new government agency designed to regulate consumer financial products. We need to support effective consumer protection that ensures concise disclosures about risks associated. Visit http://www.friendsoftheuschamber.com/issues/index.cfm?ID=469
Posted by: Audrey | September 29, 2009 4:12 PM
In 1966 Alan Greenspan wrote an article for Ayn Rand’s newsletter, The Objectivist, called “Gold and Economic Freedom.” It’s about how a commodity standard is necessary for free trade, and how paper money issued by governments is really a way of robbing and enslaving the citizens.
He has been silent on this issue since becoming the chairman of the Federal Reserve.
http://www.321gold.com/fed/greenspan/1966.html
Posted by: Jesse Forgione | September 30, 2009 1:57 PM