There was an article yesterday with comments by former Fed Chair Alan Greenspan as he came out criticizing recent QE policy decisions by the Fed. I suspect if he had been there to see the potential damage with the others in 2008/09 then he might think differently. But his notion was that the policy implemented did not improve the economy whatsoever. This statement is hard to swallow as the proof is there, yet the highly accommodative policy was always about lifting confidence in a crisis. See article.
The consequences are certainly out there and the penalty for this policy is kicked out into the future, but as we see he is a pot calling the kettle black. Certainly some policies endorsed or even ignored by the Greenspan Fed helped to light the fire in the early 2000’s before the flames raged out of control. There are consequences for all extreme policy moves but hardly ever any accountability or rationality (surprise, surprise).
The Fed/Treasury saw ‘global financial death’ in 2008 and acted in the only way to reach higher ground. To be critical is normal but without much merit today. Put another way, where was Greenspan and his solution to the financial crisis in 2008? I’m not sure he had one nor was even consulted.
Learn more about Lang’s work at Explosive Options here.
