Criticism of Greenspan's Policies
In 2000, Greenspan was questioned about his policies being too tight. Congressman Ron Paul disagreed with these critics, he saw the large growth in the money supply and noticed the bubble getting larger. Others where happy with the increase, but Paul was concerned that this bubble would burst and we would not be prepared for the aftermath. Greenspan changed the subject, ignored Paul's concern, and kept his policies in place.
Jeffery Sachs was interviewed saying that Greenspan kept interest rates too low for too long, others agreed. Greenspan fought back by saying that housing activity is driven by long term interest rates and not the overnight rates set by the fed, yet did not acknowledge that short term interest rates determine ARM interest rates. He also said that irresponsible lending practices led to the subprime mortgage crisis, but did not mention his support for deregulation and that he have corporations more freedom. However, he did admit that no one could have forecasted the financial crisis that occurred and that it would be so severe.
Jeffery Sachs was interviewed saying that Greenspan kept interest rates too low for too long, others agreed. Greenspan fought back by saying that housing activity is driven by long term interest rates and not the overnight rates set by the fed, yet did not acknowledge that short term interest rates determine ARM interest rates. He also said that irresponsible lending practices led to the subprime mortgage crisis, but did not mention his support for deregulation and that he have corporations more freedom. However, he did admit that no one could have forecasted the financial crisis that occurred and that it would be so severe.
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