I got the same impression. All those models they used don't work. And Ayn Rand philosophy of the irrational side of human behavior all of a sudden seems full of wisdom and was right after all. He's shock he could have been so wrong! I wondered if he see the mistake he made in marrying Andrea Mitchell.
Young Andrea Mitchell “latched” onto old man Greenspan knowing that by doing so, she was elevating herself socially and politically from an OK journalist to the “wife of the Chairman”. Nuff said...
He could see her face and hear her voice - it should have been obvious.
Exactly. When looking at the models and making decisions, he should have been asking himself, “If this is the model, how can people take unfair advantage of it? How much damage can they do? How can we avoid it?”
He said in the article that fear about the economy has more influence upon it than euphoria. That makes sense. Fearful people either horde their wealth as if their lives depended on it or spend it as if there were no tomorrow. Euphoric people invest and spend and may even keep a reserve.
An earlier poster suggested that when a person is in a role or position for a long time, the person and the role become one thing: they are an institution unto themselves. That makes sense to me, too. If the captains and pundits turned to Greenspan and saw he was not shaking, they drew their confidence about the future of the economy from him—whether it was warranted or not. But the upside is that it can work for awhile.
It’s funny, too. Greenspan gives full credit to Rand that you cannot rely on models that do not account for genuine human behavior—especially irrational behavior. People don’t have economic models and forecasts in their hands when making a decision about their own money. Economics is hardly a concern when they make the tiny decisions that, when taken as a sum, become big decisions that producers and consumers make about the future of the economy.
Too late, he understood that easy credit makes for easy spending. And in a society where the information bar of the average citizen becomes progressively lower and lower, the one big thing they understand is that money is being extended to them, so why save? Spend it! And so we have debt and liabilities for decades into the future measured in the trillions.