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He gave a dire warning and our representatives (I use that term loosely with some of them) in Washington…ignored it.

“Enabling these institutions [Fannie Mae & Freddie Mac] to increase in size,“ he said, “we are placing the total financial system of the future at a substantial risk.“
~Alan Greenspan

Well, they listened at first…at least some of them did. Namely Senator Chuck Hagel from Nebraska. He authored a bill, S.190. It passed the Senate Banking Committee, but then Republicans, and Democrats played political football with it and did like they usually do.

They voted along party lines. The Democrats didn’t like it, so they squashed it.

Now, pundants on both sides will continue to point the finger and blame the other guy…that’s politics…but there is a reason why every time Greenspan opened his mouth as Fed Chief, the markets went crazy. Hindsight is 20/20 though.

Not that he would, but he can so serve up some “I told you so”!

Here’s a video that backs what I’m talking about. It aired on FOX NEWS on Thursday. You may find some right wing bias, but you’ll get the point.

NOTE: I’m trying to find the actual transcript for the Greenspan prediction, but I can’t find it anywhere. The Greenspan quote comes from a USA Today article dated 2/17/2005. If you find the actual transcript, please email me the link! Thanks