Words of Wisdom from Alan Greenspan

Last week I saw an interesting interview with Alan Greenspan, former Chairman of the Federal Reserve Board, on The Today Show. He has a new book out, and thus appears to be making the rounds in support of its release. While I can’t cover everything he said in painstaking detail, I did jot down a few of the more interesting tidbits…

» He claims that his biggest frustration was President Bush’s “unwillingness to wield his veto against out of control spending.” He thought that the structure of the Bush tax cut was fine, but also felt that it needed to be paid for.

» He doesn’t accept any blame for the not foreseeing the problems with the housing bubble in the United States – he claims they tried to get mortgage rates up, but failed. He further claims that all 20-30 other countries have the same problem because the low interest rates were caused by “global forces” (i.e., a sharp decline in long term interest rates).

» He thinks oil would be in the $130-$140 per barrel range if we hadn’t gone to war in Iraq: “The way I read Saddam, that’s where he was going.”

» Does he have any thoughts for new homebuyers? Yep… He’s “worried” about the current credit crunch. He further stated that “we’re going to have to go through this adjustment” just as other countries that have been experiencing a housing bubble will have to do. He further recognized that a lot of people will have “very tragic stories.”

» Finally, does he think we’re headed for a recession? Not yet. There are some open questions, but for the moment “we’re doing okay.”

For more info, check out “The Age of Turbulence: Adventures in a New World.”