Alan Greenspan: 'Government Activism' Slowing U.S. Recovery (VIDEO)

Less than a year after testifying that his free-market approach to the financial sector was "wrong 30 percent of the time," Alan Greenspan, former chairman of the Federal Reserve, is taking aim at what he calls "government activism."

Writing in International Finance, Greenspan rails against the "frenetic pace of new financial regulations," which he says have hampered "what should be a broad-based robust economic recovery."

Greenspan directs no ill-will at the Federal Reserve's decisions in the wake of the financial collapse, nor at the Troubled Asset Relief Program (TARP), both of which he believes "were critical in assuaging the freefall."

Other regulatory structures, however, don't get off so easily. The former Federal Reserve chairman casts a skeptical eye toward both the $814 billion federal stimulus and "housing and motor vehicle subsidies," believing that the government's decision to support prices "delays the liquidation required to restore balance to market supply and demand."

Greenspan also calls the 2010 Dodd-Frank financial reform bill "impossible to judge" at the present moment. Still, he foresees it causing "many unforeseen market disruptions" in the future.

He appeared on CNBC's Squawk Box early Friday morning to further discuss the issue, saying that while the "degree of activism has actually gone down" in the last six months, he predicts the implementation of the "internally contradictory" Dodd-Frank Act will soon surface as a chief economic issue. Here's more from Greenspan:

What we're going to find is the unexpected consequences of much of the new regulations that are going to come as a result of Dodd-Frank are going to be reversed... That is going to create very high degrees of uncertainty.

Greenspan, famous for his dedication to free-market ideology, acted as Chairman of the Federal Reserve from 1987 to 2006. In the wake of the 2007 financial collapse, many scrutinized his decision to lower federal interest rates in the mid-2000s. In 2008, he admitted his tendency to avoid regulation might have been "partially wrong."

WATCH CNBC's interview with Greenspan:

Comments

[Craig2]

12:36 AM on 04/09/2011

Good evening, That Alan Greenspan, visible leader of the Ayn Randians, would invoke the "invisible hand" of Adam Smith is perverse. Just now, Ayn Rand stands above a wounded Adam Smith, bloodied sword raised high. The movie opens April 15th. And, Alan Greenspan speaks of Capitalism when it's Oligarchy he has wrought?

[Alex Gartzia]

07:31 PM on 03/22/2011

Liquidity is lacking in the markets because the banks won't lend. Free up capital and behold the cycle is revved up again. The worst part to consider is the following. Those not lacking never see the emergency of those that are in need. It's never a personal priority. It's always that frequently used phrase that administers disqualification and false empathy when dribbled from politician's mouths that makes me sick. "I know folks out there are suffering". When are our elected lackeys going to do something about it? Really.

[greensachs]

02:00 AM on 03/10/2011

Someone please show him and his likes the last exit.

[greensachs]

01:57 AM on 03/10/2011

What happens when the American people realize just how truly preposterous the Ponzi is, and that all the interest "paid" by the Treasury to the Fed ends up being remitted as cash right back to the Treasury as revenue in essence incentivizing the Treasury to spend and borrow more in order to earn more!
We can only hope that "the American people" understand this as soon as possible.

[banker67]

09:09 PM on 03/07/2011

Just because his previous policies nearly brought the entire nation to ruin, that's no reason not to give this guy all the headlines on earth now. Of the rich, by the rich, for the rich. How can a guy who so passionately believes in radical opportunism be so wrong time after time after time after time?

[Craig2]

12:36 AM on 04/09/2011

Ayn Randians all.

[Conscientious Objector]

08:05 PM on 03/07/2011

just to remind you libs. bush wanted to sh--can greenspan when his greenspan's term was up, but congressional dems through a hissy fit over it, proclaiming him to be essential to the economy, and in the process destabilizing the markets with predictions about what would happen if he wasnt renominated. bush hated greenspan in part because greenspan deliberately tightened money to cause what was supposed to be a mild recession [and which was generally regarded as unnecessary and political and turned out to be rather severe]at the end of bush 1's term, thereby throwing the election to clinton. And, bush two was right to want to get rid of him.

[cgrier61]

08:49 AM on 03/08/2011

Can you sight a reference to your claim that "(B)ush wanted to sh-can (G)reenspan?" I only ask because I can find no reference to it myself. As well, in 2005, George W. Bush awarded the Presidential Medal of Freedom to Alan Greenspan. Also, far from throwing a "hissy fit" over any potential "sh-can(ing)" of Greenspan, in 2005, both Democratic leaders from the house and senate criticized Greenspan over his support of Bush's 2001 tax cut plan as well as Greenspan's support of the Bush plan to privatize Social Security.

[Conscientious Objector]

09:47 AM on 03/08/2011

if you cant find it it is only because you dint look. try again

[JollyD]

12:08 AM on 03/09/2011

Don't you have a job of something?

[alithegreat]

06:57 PM on 03/07/2011

greenspan just wants the government to abandon the american people so that he and his big business pals can finally collect the last of the money from the middle class and finally drive us all into the servitude that they wish us to become accustomed to.

the poor and middle class obviously can't be trusted to make good financial decisions, bc if they could, they'd be rich, and they're not. they really should take our money bc we can't be trusted with it. *snark*

[tster1965]

06:42 PM on 03/07/2011

I blame Greenspan for a lot of the financial problems that plague our country. I can't believe that he still gives interviews. It's like asking for Paul Wolfowitz's opinion on foreign policy. Both are guilty.

[lightningbolt]

03:35 PM on 03/07/2011

Nobody should listen to Greenspan.  He is the primary person responsible for the worst financial crisis since the Great Depression.  He failed BIG.  His reputation is in the toilet.

[Craig2]

12:38 AM on 04/09/2011

Good evening lightningbolt. Ayn Randians love him.

[GEM-592]

03:05 PM on 03/07/2011

I only wish the government would get active enough to put the greener in jail, where he belongs.

[rcmfla]

01:51 PM on 03/07/2011

Is this guy serious!?! We've seen what happens when Wall Street is left to their own devices. Corporations are leaving American workers and hiring what amounts to slave labor to satisfy the insatiable greed.

[Craig2]

12:40 AM on 04/09/2011

Good evening rcmfla, He's serious. He is a follower of Ayn Rand.

[madashellvoter]

10:35 AM on 03/07/2011

He was affHe’s been dreadful ever since he accepted the position.30 years ago. I don’t know why anybody still listen’s to him. He's made some very horrible mistakes!!

[Konnie]

09:33 AM on 03/07/2011

dear lord man, please stop talking. you've been wrong about everything for so long............aren't you even a little embarassed? after reading matt tiabbi's griftopia chapter on your tenure on the world stage, (which took me some time, as i kept getting so angry i had to put the book down, and walk
off the blood pressure spike) i think you should be sharing bernie madoff's cell. but that's just me.

[roxette]

05:01 PM on 03/07/2011

Matt Taibbi calls Greenspan " The biggest a$$$$le in the world" in Griftopia. Me too I was angry when I read the chapter regarding Greenspan . This guy is shameless.

[jkb5371]

09:15 AM on 03/07/2011

This guy is what, 212 years old? He's like friggin' herpes, keeps coming back at the wrong time to cause a pain in your ba**s...

[farmilyman]

12:09 AM on 03/07/2011

Mr Bubbles thanks for your input.