It takes a big man to admit he’s wrong.
There are few men bigger than Alan Greenspan. And there are few men who have gone wrong in such a big way.
Although he stands shy of six feet tall, the former Federal Reserve Chairman was the colossus of the business world as he oversaw the longest economic boom in American history. But when financial collapse swallowed up the bulls of Wall Street like the cows in Pharaoh’s dream, Mr. Greenspan’s reputation deflated along with the economy.
To his credit, the erstwhile guru humbled himself and confessed the error of his ways. In October, 2008, Mr. Greenspan gave testimony on Capitol Hill before the House Oversight Committee concerning the economic meltdown that ravaged the country. This was the takeaway:
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.”
In other words, despite all logic to the contrary, people cannot be trusted to do what is in their own best interest.
The question is: why not?