A Chastened Greenspan

Fascinating stuff coming out of Alan Greenspan’s testimony today, difficult stuff for dyed-in-the-wool libertarians to countenance, I’d imagine. Snippets from the WSJ story:

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity (myself especially) are in a state of shocked disbelief,” according to Mr. Greenspan.

…

But when Mr. Waxman pressed “were you wrong” about the benefits of deregulation, Mr. Greenspan responded, “partially.” The “flaw” in the assumptions he had over four decades, Mr. Greenspan said, was that lending institutions themselves were best able to protect the interest of their shareholders.

Thus what looked like a solid edifice to his thinking broke down, Mr. Greenspan said.

I look forward to seeing how more orthodox libertarians around the web parse his remarks. More thoughts on this in the coming days from me as well, time permitting.