Lune, at Naked Capitalism, on Greenspan’s commentary, "Repel the calls to contain competitive markets."
Quelle Surprise! Greenspan warns about the dangers of regulation
A commentary entitled "Repel the calls to contain competitive markets" contains such choice nuggets of advice to the world’s financial regulators as these:
The economic edifice – market capitalism – that has fostered this expansion is now being pilloried for the pause and partial retrenchment. The cause of our economic despair, however, is human nature’s propensity to sway from fear to euphoria and back, a condition that no economic paradigm has proved capable of suppressing without severe hardship. Regulation, the alleged effective solution to today’s crisis, has never been able to eliminate history’s crises.
This discounts the tremendous amount of regulation and oversight that is required for "market capitalism", embodied in such institutions as the stock market and private corporations, to function and thrive. Stock markets are one of the most highly regulated and supervised markets in existence.
Furthermore, Mr. Greenspan conveniently ignores that the Great Depression was solved through the government’s fiscal and monetary policies (and of course the greatest government fiscal stimulus: war), rather than market forces. He also ignores that much of the regulatory apparatus in place is specifically designed to combat human nature’s so-called propensity to sway from fear to euphoria and back (including the circuit-breakers instituted in the markets under his watch after the 1987 crash). 
Mr. Greenspan then goes on to assert that:
A financial crisis is heralded, in fact defined, by sharp discontinuities of asset prices. The crisis must thus be unanticipated. The fact that risk was heavily underpriced for much of this decade was broadly recognised in the financial community, but the timing of the sharp price correction was nonetheless a surprise.
While it may have been a surprise to Mr. Greenspan and other market boosters, the coming collapse in housing prices, and their long-term unsustainability at current levels was widely discussed. While it was not the majority opinion, it was nevertheless widely held by many respected economists. Mr. Greenspan can admit he was wrong, but here goes further to assert that no one can be right and this is clearly not true…"
