In recent days there has been quite a scene in the credit crunch blame game. It always comes to this, people want answers and want someone to hold accountable. The question on a lot of people's lips in recent weeks is, Did the former Fed Chairman Greenspan contribute to the credit crunch through mistakes he and the rest of the Federal Reserve made in recent years? A pretty solid amount of people believe he is at least somewhat to blame, but apparently, he isn't one of them.
Mr. Greenspan is currently on a whirlwind tour through all the possible media outlets getting out his side of the story. He even went as far as to acknowledge the fact that he is seeking out interviews so that he can repair his damaged reputation. The Wall Street Journal recently reported that Mr. Greenspan is "bemused and dismayed" by the ferocity of the recent arguments against some of his policy moves. Greenspan was quoted on a CNBC interview with Maria Bartiromo as saying he had no decision at the Federal Reserve that he regretted or that he would have gone back and changed.
It's hard to believe that Greenspan believes the Fed he chaired played no role whatsoever in the current credit crunch. Most economists believe at the very least he played some role by keeping short term rates too low for too long of a period of time, contributing to the housing bubble. Greenspan says it wasn't his job to control bubbles, simply to keep sound monetary policy.
I truly believe that in the end Alan Greenspan is doing himself no good by running out to the media every time to defend his policies and give suggestions about the future. He would do better to be more like Paul Volcker and just sit back and allow things to happen as they will, commenting sparsely to the press. The fact is, Mr. Greenspan was a major public figure for a long period of time and there will always be questions about what he might have done right or wrong, he just needs to let them play themselves out in the court of public opinion. By taking credit for the things that have gone right and not acknowledging any mistakes he has already taken a public relations hit he likely will never fully recover from.
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