Although the former chairman of the Fed has managed to become the genius of finance and the most important person in the world, it appears now that some specialists are criticizing his previous policy.
Greenspan was chairman of the Fed from 1987 to 2006...almost twenty years! During these years, he managed to build a wonderful reputation. He maintained the interest rates at a low level for a long while in order to boost the economy and avoid a recession. Thanks to this policy, Greenspan enabled USA to reach very high level of growth.
Some analysts criticize him regarding his policy. They claim current financial problems of USA are due to previous mistakes of Greenspan. According to them, Greenspan shouldn't have slashed interest rates to such a low level to avoid housing bubble.
On the other hand, Greenspan claims nothing can avoid a bubble.”Bubbles are unavoidable”. Fed policy is not the origin of this crisis...the bubble was a world phenomenon! By trying to avoid
housing bubble, Fed might have created a recession.
Bernanke, the new chairman of the Fed, has decided to defend Greenspan policy by claiming he would have done exactly the same.
To know more about the story, look at the video in this link : http://video.google.co.uk/videoplay?docid=-7230818744817509491&q=greenspan&total=527&start=0&num=10&so=0&type=search&plindex=4
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