Greenspan: I Played No Role in Housing Bubble, Calls Sen. Paul’s ‘Audit the Fed’ Bill ‘Terrible’

TAPPER He joins me ░░░░░░░░ in Washington D C ░░░░░░░░ sir Thanks for being ░░░░░░░░ So Rand Paul is ░░░░░░░░ to hold up Yellen ░░░░░░░░ nomination unless he gets ░░░░░░░░ vote on this audit ░░░░░░░░ Fed bill detailing everything ░░░░░░░░ Federal Reserve has done ░░░░░░░░ is doing I know ░░░░░░░░ oppose it You think ░░░░░░░░ Fed needs to remain ░░░░░░░░ Why should people not ░░░░░░░░ what the Fed has ░░░░░░░░ doing Greenspan First let ░░░░░░░░ just say on the ░░░░░░░░ of accounting each of ░░░░░░░░ 12 reserve banks are ░░░░░░░░ audited the Federal Reserve ░░░░░░░░ is fully audited by ░░░░░░░░ accountants I ve done ░░░░░░░░ lot of accounting over ░░░░░░░░ life I m telling ░░░░░░░░ the books are as ░░░░░░░░ as you can imagine ░░░░░░░░ there s very little ░░░░░░░░ can go wrong there ░░░░░░░░ one issue that he ░░░░░░░░ raising is auditing the ░░░░░░░░ deliberations of the Federal ░░░░░░░░ which is a very ░░░░░░░░ mistake TAPPER Why Greenspan ░░░░░░░░ because what history tells ░░░░░░░░ is if you have ░░░░░░░░ sort of audit by ░░░░░░░░ political system which is ░░░░░░░░ course what it is ░░░░░░░░ will get a bias ░░░░░░░░ inflationary monetary policy and ░░░░░░░░ s the reason why ░░░░░░░░ original founders of the ░░░░░░░░ made the terms of ░░░░░░░░ 14 years for precisely ░░░░░░░░ avoid that reason So ░░░░░░░░ is a terrible idea ░░░░░░░░ OK Let s talk ░░░░░░░░ your book I know ░░░░░░░░ s what you want ░░░░░░░░ talk about I want ░░░░░░░░ get to what s ░░░░░░░░ in a second but ░░░░░░░░ read a very harsh ░░░░░░░░ of it by the ░░░░░░░░ Republic by a liberal ░░░░░░░░ writer in the New ░░░░░░░░ I want to get ░░░░░░░░ response to it because ░░░░░░░░ reflects a lot of ░░░░░░░░ negative feelings that many ░░░░░░░░ have about your stewardship ░░░░░░░░ the Fed He writes ░░░░░░░░ who has paid attention ░░░░░░░░ the economy the past ░░░░░░░░ years knows how ridiculous ░░░░░░░░ is the Fed Greenspan ░░░░░░░░ architect of the policies ░░░░░░░░ led to the great ░░░░░░░░ He suggests you share ░░░░░░░░ blame with JPMorgan Chase ░░░░░░░░ duping investors into purchasing ░░░░░░░░ backed securities that were ░░░░░░░░ with garbage loans Because ░░░░░░░░ quote allergy to regulation ░░░░░░░░ unshakable belief in the ░░░░░░░░ of the free market ░░░░░░░░ you to ignore the ░░░░░░░░ and its risks infusing ░░░░░░░░ and consumers with confidence ░░░░░░░░ the run up in ░░░░░░░░ prices was perfectly normal ░░░░░░░░ do you respond to ░░░░░░░░ Greenspan I respond in ░░░░░░░░ book itself I explain ░░░░░░░░ what happened what led ░░░░░░░░ the global bubble Remember ░░░░░░░░ is not an American ░░░░░░░░ The housing bubble looks ░░░░░░░░ same whether you re ░░░░░░░░ to Canada Australia or ░░░░░░░░ of 20 other countries ░░░░░░░░ re somewhere in the ░░░░░░░░ So the bubble itself ░░░░░░░░ neither an American issue ░░░░░░░░ something which we were ░░░░░░░░ of The critical question ░░░░░░░░ we all missed is ░░░░░░░░ it would break and ░░░░░░░░ of the things I ░░░░░░░░ basically in the book ░░░░░░░░ you cannot determine that ░░░░░░░░ essentially to say what ░░░░░░░░ individual said all I ░░░░░░░░ suggest is read the ░░░░░░░░ and determine for yourself ░░░░░░░░ you think TAPPER Well ░░░░░░░░ don t want to ░░░░░░░░ entirely on the criticism ░░░░░░░░ think one of the ░░░░░░░░ this is an investigation ░░░░░░░░ go back and look ░░░░░░░░ what you did what ░░░░░░░░ have been done differently ░░░░░░░░ one of the things ░░░░░░░░ conclude is that spirits ░░░░░░░░ you call them exuberance ░░░░░░░░ anxiety that those things ░░░░░░░░ a bigger role Do ░░░░░░░░ think that they played ░░░░░░░░ bigger role than say ░░░░░░░░ of regulation sufficient regulation ░░░░░░░░ Wall Street Greenspan Absolutely ░░░░░░░░ is basically an endeavor ░░░░░░░░ find out what makes ░░░░░░░░ economy function and how ░░░░░░░░ to understand it What ░░░░░░░░ issue of spirits is ░░░░░░░░ about is a change ░░░░░░░░ view on my part ░░░░░░░░ I presume a number ░░░░░░░░ the people who are ░░░░░░░░ who make a living ░░░░░░░░ that is that it ░░░░░░░░ not that we were ░░░░░░░░ there was irrational actions ░░░░░░░░ people acted crazily Eyes ░░░░░░░░ opened in the canyons ░░░░░░░░ Wall Street So that ░░░░░░░░ not the issue The ░░░░░░░░ is fundamentally is it ░░░░░░░░ enough to actually model ░░░░░░░░ and be able to ░░░░░░░░ it for forecasting purposes ░░░░░░░░ general presumption of most ░░░░░░░░ was no not really ░░░░░░░░ it s random and ░░░░░░░░ can t get a ░░░░░░░░ on what is going ░░░░░░░░ The big surprise to ░░░░░░░░ is I began to ░░░░░░░░ at the reasons why ░░░░░░░░ failed to get September ░░░░░░░░ 2008 on time TAPPER ░░░░░░░░ crash of Wall Street ░░░░░░░░ The huge people just ░░░░░░░░ and I would say ░░░░░░░░ the major issue that ░░░░░░░░ us is we hadn ░░░░░░░░ a clue as to ░░░░░░░░ that happened The purpose ░░░░░░░░ this book is to ░░░░░░░░ back to square one ░░░░░░░░ to see what essentially ░░░░░░░░ did wrong and what ░░░░░░░░ turns out we did ░░░░░░░░ is that the fundamental ░░░░░░░░ that people act in ░░░░░░░░ own rational self interest ░░░░░░░░ the time of course ░░░░░░░░ wrong We knew that ░░░░░░░░ far more importantly you ░░░░░░░░ model animal spirits and ░░░░░░░░ matters TAPPER That matters ░░░░░░░░ the future predicting Greenspan ░░░░░░░░ is a huge issue ░░░░░░░░ you re going from ░░░░░░░░ type of system to ░░░░░░░░ at the economy to ░░░░░░░░ wholly different one And ░░░░░░░░ is basically what that ░░░░░░░░ sort of a detective ░░░░░░░░ in a way how ░░░░░░░░ proceed to try to ░░░░░░░░ out why did we ░░░░░░░░ make this terrible mistake ░░░░░░░░ It s getting great ░░░░░░░░ We wish you the ░░░░░░░░ of luck with it ░░░░░░░░ book is The Map ░░░░░░░░ The Territory Risk Human ░░░░░░░░ and The Future Of ░░░░░░░░ Alan Greenspan thank you ░░░░░░░░ much for being here ░░░░░░░░ really appreciate it.”