BS. This statement seems to be a setup to blame Bush for a lot of stooooopid loans. So now I suppose Bush is supposed to bail out the whole industry.
I think Bush has already promised to bail out the industry. Greenspan definately shares some of the blame for this, but I am not sure how much. I am not a big Bush fan, but I don’t see how he is responsible.
Honestly, I don’t know why this was so hard to predict. Rapidly rising housing prices, low interest rates, lots of speculation, and mortgages being issued for interest only loans, to qualify purchasers for the maximum home possible. Looked like disaster from the beginning to me.
I do think Greenspan is right here though. The housing market has the potential to seriously impact the US economy. America still has a major impact on the rest of the world. Without strong American investment, the world economy will suffer. Greenspan may have made some mistakes, but he controlled the Fed for 16 years, most of them very successfully. He isn’t an idiot.