Dean Baker Throws Alan Greenspan Under The Bus!

Dean Baker, co-director of the Center for Economic and Policy Research in Washington, has been critical of Alan Greenspan and his policies for years. He has been a strong voice and critic during the housing bubble's ridiculous run and he has every right to speak out now that the bubble has burst and the real pain has just begun.

Hopefully, in the future, sane and credible voices, like his, will be at the forefront of economic discussions and the days of having to listen to hacks like Alan Greenspan, Ben Bernanke, David Lereah, and Nicholas Retsinas...etc will only be a painful memory.

The Housing Bubble Explodes: Fed Rushes for Fire Extinguisher

It was easy for any competent macroeconomist to recognize that the housing market was in the midst of an unsustainable bubble. By its peak in 2006, the run-up had generated more than $8 trillion in housing bubble wealth. It was inevitable that this bubble would burst and wreak the sort of havoc that we are now seeing.

The housing bubble was allowed to expand to such dangerous proportions because the Fed was not run by a competent macroeconomist. It was run by Alan Greenspan, who used to be the greatest central banker of all time. Greenspan did nothing to stem the growth of the bubble. In fact, he encouraged its growth by recommending that people take out adjustable rate mortgages. He also dismissed the views of the competent macroeconomists who tried to warn of the bubble, assuring the markets that everything was under control.