It's easy to blame the nascent recession on George Bush, but it isn't
fair. The man who deserves more blame is former Federal Reserve
chairman Alan Greenspan
(who is closer to Bill Clinton). By constantly lowering interest rates,
neglecting to regulate mortgage lending and promoting the idea that
exotic home loans would be good for the market, Greenspan blew more air
into the housing bubble than anyone.

As a libertarian and former Ayn Rand acolyte, Greenspan believed
that markets regulate themselves. In the long term, he might be right –
some would say what we're seeing now is simply a painful adjustment.
But, as another economist said, "in the long run, we'll all be dead."
Greenspan was appointed to help make sure the market didn't leave too
many people homeless in the meantime – and he and his ideology failed
miserably. So why won't he go away?

In a Wall Street Journal interview,
Greenspan defends his reputation under the guise of "getting the
lessons of the crisis right." To most Americans, those lessons would
indicate that the government shouldn't encourage speculative excess,
and that Greenspan is a little gnome. (Sure, he's real smart, but how
much damage have the best and the brightest done to this country
already?) But, like Bush The Decider, Greenspan says he doesn't regret
a single decision.

It takes a certain kind of ego to express
such confidence: Not one, single decision over the course of almost two
decades? Come on. And even if he was right most of the time – which I
don't believe – shouldn't he express some human sympathy for those
whose houses have been foreclosed on? Or are the audiences that pack
his six-figure speaking engagements interested in other things.

There's more at stake here than Greenspan's reputation. At a time when
there's public desire to change the system of financial regulation, we
should be doing so aggressively in a way that makes sure the market
doesn't steamroll those who participate in it. If we can all agree that
Greenspan failed, that task will be that much easier. If Greenspan gets
to write history however, he'll convince us that the market knows best
and government should simply stay out of the way. New regulations will
be toothless.

If we trust Greenspan – who inflated the bubbles
that burst over our economy – we won't have learned anything at all.
And the next bubble could be even worse.