So, Alan “Bubbles” Greenspan is trying to claim that while he was Fed Chairman, he did nothing to create the housing bubble.

Well, even if it weren’t a Wall Street Journal OP/ED, we would know that this was a lie.

He lowered rates to the bone, endorsed things like CDOs, but he is claiming that since mortgage rates (lending long) drove the home price bubble, and not the Fed Funds rate (lending short), it’s just not his fault.

Except, of course, the good monetarist he is, he always claimed that the Fed Funds rate did have an effect on home mortgage rates, and the low short term rates drove people to real-estate backed securities in search of a decent return.

Furthermore, this had a worldwide effect, because it forced other central banks to lower rates, because otherwise their currencies would have appreciated against the $US, killing their exports.

Then there was his endorsement of ARMs, because housing never went down, and his steadfast refusal to “take away the punch bowl” in bubble markets, because he believed that the markets were perfect….A policy which the Federal Reserve has now explicitly disavowed.

How stupid does he think we are?

I don’t have a degree in economics, and even I get that he is simply spouting gibberish in an attempt to obfuscate his leading role in creating an economy of bubbles, arbitrage, and criminal fraud.

Seriously, did Alan Greenspan get his PhD from a cereal box or something?

Oh…I forgot….He DID get his PhD from the back of a cereal box.