Today’s House Oversight hearing into the credit crisis with witnesses Alan Greenspan, Chris Cox, and John Snow is grim and awful political theater. While not unexpected, it is by the most politicized hearing we have had too date, with members trying to noisily pin subprime on Barrack Obama, entirely on the GSEs, regulators, etc. There are also non-stop attempted gotchas ("Did you know? Huh? Didya?"), plus congress members putting up signs, shouting, and doing everything except throwing spitballs.
One of the few interesting moments so far has been this one with Alan Greenspan:
THE HOUSING BUBBLE BECAME CLEAR TO MEET SOMETIME IN EARLY 2006, IN RETROSPECT. I DID NOT FORECAST A SIGNIFICANT DECLINE BECAUSE WE HAVE NEVER HAD A SIGNIFICANT DECLINE IN PRICES.
Got that? Greenspan only noticed the housing bubble in 2006, as it was bursting, and his main reason for not thinking prices would not decline in the U.S. is because the U.S. has never had a significant decline. Sad stuff.