The latest quote from Alan Greenspan being made much of around the web is the following:
We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand.
Too many are saying that these words demonstrate Greenspan tried to stop the debate on the housing bubble. Now, we like Greenspan as a whipping boy as much as anyone but this just isn’t true. Let’s look at the quote in fuller context:
Let me first follow up on your transparency assessment. I think Cathy Minehan has raised an interesting point. I would say this: We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand. We have a ratchet in here where, if we were to move forward, we can’t go back. So the concept of transparency is a very important concept but one that should be approached with a recognition that we cannot move back and forth on it. I’m a little concerned here that by raising certain issues we may not be able to backtrack.
Hiding the housing bubble? No. Perhaps only within the larger framework of the Fed’s lack of transparency. The discussion is saying that once the Fed begins discussing it’s own transparency, it has to be more transparent.
Not sure which is more unsavory. Hiding the housing bubble or being so opaque that no one including regulators can tell what’s going on.
Reps. Alan Grayson and Ron Paul have cosponsored the amended Federal Reserve Transparency Act of 2009 (H.R. 1207). Its Senate version, introduced by Senator Bernie Sanders (Ind.-VT), is called the Federal Reserve Sunshine Act of 2009 (S. 604), and it has 32 cosponsors. If you believe that the privately owned Federal Reserve should be accountable to all US taxpayers and citizens please let your elected representatives including the White House know.