Kuttner on Greenspan and Financial Regulation

Thanks to Pierre Habbard of TUAC for this

Quote:
“His memoir also confirms Mr. Greenspan’s strong support for free
markets and his deep antipathy to regulation. But I don’t see how you
can have it both ways. If you are a complete believer in the proposition
that free markets are self-regulating and self- correcting, then you
logically should let markets live with the consequences. On the other
hand, if you are going to rescue markets from their excesses, on the
very reasonable ground that a crash threatens the entire system, then
you have an obligation to act pre-emptively, prophylactically, to head
off highly risky speculative behavior. Otherwise, the Fed just invites
moral hazards and more rounds of wildly irresponsible actions.”
http://www.house.gov/apps/list/hearing/financialsvcs_dem/testimony_-_kut
tner.pdf