Alan “Bubbles” Greenspan said that it was impossible, so all that could be done was to clean up afterwards, though it’s clear that Ben Bernanke is s looking at ways for the Federal Reserve to intervene before bubbles get too frothy.

He’s also looking at how excessive consolidation in banks made the current troubles worse.

This is a clear repudiation of Greenspan’s policies and philosophies.

Kevin Drum nails the problem clearly, at least with respect to housing, when he asks when do asset bubbles become inflationary.

While it is hard to claim that the Dot Com boom was inflationary, it’s clear that the housing bubble was. These were not abstract financial assets, they were essentials of life that people pay for, but the Fed, and the BLS, specifically gamed the inflation data so as not to have to count double digit increases in the cost of shelter as inflation.

Of course Alan “Bubbles” Greenspan, who hates wages, but loves unearned income, would never subscribe to the idea that this was inflationary, but he’s a complete wanker.