Alan Greenspan Quote du Jour

From the Financial Times, a fairly remarkable concession from ex- Fed chair Alan Greenspan:

`The presumption that we were fully independent and have full discretion was false,” Greenspan said in an interview published by the newspaper on Sept. 16. Raising rates faster and sooner would not have been acceptable “to the political establishment,” Greenspan said.

[FT via Bloomberg]


  1. The Fed has a lot of independence and takes unpopular actions all of the time. It is not as independent as the Supreme Court, for example, nor would we want it to be.
    It would have been nice to hear a little more on this theme, and maybe we will in future interviews.

  2. Interesting. Mr. Bubbles should know better.

  3. Other institutions such as the Bank of England are not independent either. If they were, Northern Rock might have already collapsed and we might have seen a bigger bank run than we did.
    Mervyn King was hauled before the House of Lords Economic Affairs Committee although one could argue how life peers could be called political. But since they occupy benches of one part or the other, this is, er, academic.
    The FT called Mervyn King’s stance towards not making an early intervention “too pure and too aloof an intellectual position”.