In another comment on January 3rd at the AEA meeting, Fed Chairman Alan Greenspan engaged in a little pre-emptive revisionism. He prepared the ground for a future recession and the inevitable blame game around it. Here, from a note to the prepared speech, is his comment, direct from Alan to his future biographers:
“Even if imbalances still persist in our current environment, the business decline that began in March 2001 came to an end in November of that year, according to the National Bureau of Economic Research. We experienced tepid recovery until the second half of last year, when GDP accelerated considerably. Hence, when the next recession arrives, as it inevitably will, it will be a stretch to attribute it to speculative imbalances of many years earlier.”
Put another way, while a recession will come, sooner or later, it won’t have anything to do with my fixes for the bubble that I wasn’t sure was a bubble until after I said it wasn’t. Or more succinctly, “We fixed things — it’s not my fault they won’t stay fixed”.