Well, no. According to the NYT, Greenspan declared that the mistake he made was to trust that “free markets could regulate themselves without government oversight.” Greenspan admitted that he was “partially wrong in not having tried to regulate the market for credit-default swaps.” He has found a flaw in the “free market ideology” as the NYT put it, and is now in “a state of shocked disbelief.”
We also are in a state of shocked disbelief. Or perhaps not. Instead of blaming himself for his monetary policy and admitting once and for all that central banking is not the best monetary system available (he actually admitted that the economy is too complex to be forecasted by Fed experts), he blamed it on the free market. Greenspan true mistake is to absolve himself from all responsibility by saying that he had faith in the free market system and that that system abandoned him (i.e. it had a flaw).
Source
My Thoughts: Greenspan was a statist Keynesian hack. He could talk free market rhetoric, but the free market actions never followed. ( A central banking system, which he chaired, is inherently anti-free market.) Free market "ideology" is not flawed. Is it perfect? No. Is it the best system ever devised by man for running an economy? Yes. The market system is based on the profit/loss system. The opponents of free markets create straw men arguments. They assume the absence of perpetual prosperity and growth is a failure of the market system. This is the wrong measure. When compared to perfection, the market system will fail to meet expectations. The proper comparison is free markets v. socialism (communism, central planning, etc). Compared to these systems the benefits of the free market system should be obvious to all but the most extreme socialist ideologues. Also the Keynesian interventionist state that greatly contributed and caused the current crisis should never be confused for a true free market.
Rothbard on Greenspan
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