Editing Alan Greenspan (section)

==Reception==

===Housing bubble===
In the wake of the [[Subprime mortgage crisis|subprime mortgage and credit crisis]] in 2007, Greenspan stated that there was a [[economic bubble|bubble]] in the U.S. housing market, warning in 2007 of "large double digit declines" in home values "larger than most people expect".<ref name="Greenspan admits bubble FT">{{cite news |first=Krishna |last=Guha |title= Greenspan Alert on US House Prices |date=September 17, 2007 |work=Financial Times |url=http://www.ft.com/cms/s/0/31207860-647f-11dc-90ea-0000779fd2ac.html |access-date=October 17, 2008 |archive-url=https://web.archive.org/web/20070921031032/http://www.ft.com/cms/s/0/31207860-647f-11dc-90ea-0000779fd2ac.html |archive-date=September 21, 2007 |url-status=live}}</ref> Greenspan also noted, however, "I really didn't get it until very late in 2005 and 2006."<ref>{{cite news|first=Mark |last= Felsenthal |title= Greenspan Says Didn't See Subprime Storm Brewing |date=September 13, 2007 |work=Reuters |url=https://www.reuters.com/article/newsOne/idUSWBT00756820070913 |access-date=June 22, 2009}}</ref>

Greenspan stated that the housing bubble was "fundamentally engendered by the decline in real long-term interest rates",<ref name="Greenspan interest rates FT">{{cite news |first=Krishna |last=Guha |title=A Global Outlook |work=Financial Times |date=September 16, 2007 |url=http://www.ft.com/cms/s/0/976b7442-6486-11dc-90ea-0000779fd2ac.html |archive-url=https://ghostarchive.org/archive/20221210/http://www.ft.com/cms/s/0/976b7442-6486-11dc-90ea-0000779fd2ac.html |archive-date=December 10, 2022 |url-access=subscription |url-status=live |access-date=October 17, 2008}}</ref> though he also claims that long-term interest rates are beyond the control of central banks because "the market value of global long-term securities is approaching $100 trillion" and thus these and other asset markets are large enough that they "now swamp the resources of central banks".<ref name="Greenspan mortgage crisis roots WSJ">{{cite web |last=Greenspan |first=Alan |title=The Roots of the Mortgage Crisis |work=Wall Street Journal |date=December 12, 2007 |url=http://opinionjournal.com/editorial/feature.html?id=110010981 |access-date=June 22, 2009 |ref=none}}</ref>

After the [[September 11, 2001 attacks]], the [[Federal Open Market Committee]] voted to reduce the [[federal funds rate]] from 3.5% to 3.0%.<ref>{{cite news | url = http://www.federalreserve.gov/boarddocs/hh/2002/February/FullReport.txt |title = Monetary Policy Report to the Congress |date=February 27, 2002 |access-date=June 17, 2009 |archive-url =https://web.archive.org/web/20090511163423/http://www.federalreserve.gov/boarddocs/hh/2002/February/FullReport.txt |archive-date=May 11, 2009 |url-status=live}}</ref> Then, after the [[accounting scandals]] of 2002, the Fed dropped the federal funds rate from then current 1.25% to 1.00%.<ref name=hearing>{{cite web |url=http://www.house.gov/jec/hearings/11-13-02.pdf |title=Economic Outlook Hearing before the Joint Economic Committee, Congress of the United States |date=November 13, 2002 |publisher=U.S. Government Printing Office |access-date=June 17, 2009 |archive-url=https://web.archive.org/web/20090629181728/http://www.house.gov/jec/hearings/11-13-02.pdf |archive-date=June 29, 2009 |url-status=live}}</ref> Greenspan stated that this drop in rates would have the effect of leading to a surge in home sales and refinancing, adding that "Besides sustaining the demand for new construction, mortgage markets have also been a powerful stabilizing force over the past two years of economic distress by facilitating the extraction of some of the equity that homeowners have built up over the years".<ref name=hearing/>

According to some, however, Greenspan's policies of adjusting interest rates to historic lows contributed to a housing bubble in the United States.<ref>{{cite book |last=Ritholtz |first=Barry |title=Bailout Nation |url=https://archive.org/details/bailoutnationhow0000rith |url-access=registration |location=New York |publisher=Wiley |year=2009 |isbn=978-0-470-52038-3}}</ref> The [[Federal Reserve]] acknowledged the connection between lower interest rates, higher home values, and the increased liquidity the higher home values bring to the overall economy: "Like other asset prices, house prices are influenced by interest rates, and in some countries, the housing market is a key channel of monetary policy transmission."<ref>{{cite report |url= http://www.federalreserve.gov/pubs/ifdp/2005/841/ifdp841.pdf |title= House Prices and Monetary Policy: A Cross-Country Study |first1= Alan G. |last1=Ahearne |first2=John |last2= Ammer |first3=Brian M. |last3=Doyle |first4=Linda S. |last4=Kole |first5=Robert F. |last5=Martin |date=September 2005 |publisher=Board of Governors of the Federal Reserve System |name-list-style=amp}}</ref>

In a February 23, 2004, speech,<ref name="debt">{{cite conference |url=http://www.federalreserve.gov/boarddocs/speeches/2004/20040223/ |title=Understanding household debt obligations |conference= Credit Union National Association 2004 Governmental Affairs Conference |publisher=[[Federal Reserve Board]] |last=Greenspan |first=Alan |date=February 23, 2004 |access-date=June 22, 2009}}</ref> Greenspan suggested that more homeowners should consider taking out [[adjustable-rate mortgage]]s (ARMs) where the interest rate adjusts itself to the current interest in the market.<ref>{{cite news |url=https://www.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm |title= Greenspan Says ARMs Might Be Better Deal |work=USA Today |first1=Sue |last1=Kirchhoff |first2=Barbara |last2=Hagenbaugh |date= February 23, 2004 |access-date=June 17, 2009}}</ref> The Fed's own funds rate was at a then all-time-low of 1%. A few months after his recommendation, Greenspan began raising interest rates, in a series of rate hikes that would bring the funds rate to 5.25% about two years later.<ref>{{cite news |url=http://www.atlanticfreepress.com/content/view/768/81/ |title=Connect the Dots |last=Martenson |first=Chris |date=January 23, 2007 |publisher=Atlantic Free Press |access-date=June 17, 2009 |url-status=dead |archive-url=https://archive.today/20120718195427/http://www.atlanticfreepress.com/content/view/768/81/ |archive-date=July 18, 2012}}</ref> A triggering factor in the [[2007 subprime mortgage financial crisis]] is believed to be the many subprime ARMs that reset at much higher interest rates than what the borrower paid during the first few years of the mortgage.

In 2008, Greenspan expressed great frustration that the February 23 speech was used to criticize him on ARMs and the [[subprime mortgage crisis]], and stated that he had made countervailing comments eight days after it that praised traditional fixed-rate mortgages.<ref>{{cite news|last=Ip |first=Greg |title=His Legacy Tarnished, Greenspan Goes on Defensive |pages=A1 |work=Wall Street Journal |url=https://www.wsj.com/articles/SB120760341392296107 |access-date=April 8, 2008 |date=April 8, 2008 |archive-url=https://web.archive.org/web/20080411225037/http://online.wsj.com/article/SB120760341392296107.html |archive-date=April 11, 2008 |url-status=live }}</ref> In that speech, Greenspan had suggested that lenders should offer to home purchasers a greater variety of "mortgage product alternatives" other than traditional fixed-rate mortgages.<ref name="debt" /> Greenspan also praised the rise of the subprime mortgage industry and its tools for assessing credit-worthiness:
{{blockquote|text=Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country&nbsp;... With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers.&nbsp;... Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s.<ref>{{cite conference |title=Consumer Finance |first=Alan |last=Greenspan |conference=Federal Reserve System's Fourth Annual Community Affairs Research Conference |publisher=[[Federal Reserve Board]] |date=April 8, 2005 |url=http://www.federalreserve.gov/BoardDocs/speeches/2005/20050408/default.htm |access-date=June 22, 2009 |archive-url=https://web.archive.org/web/20090616124302/http://www.federalreserve.gov/BoardDocs/speeches/2005/20050408/default.htm |archive-date=June 16, 2009 |url-status=live}}</ref>}}

The [[subprime lending|subprime]] mortgage industry collapsed in March 2007, with many of the largest lenders filing for bankruptcy protection in the face of spiraling foreclosure rates. For these reasons, Greenspan has been criticized for his role in the rise of the housing bubble and the subsequent problems in the mortgage industry,<ref>{{cite news |title=The Great Unraveling |author= Roach, Stephen S. |publisher=[[Morgan Stanley]] |date=March 16, 2007 |url=http://www.morganstanley.com/views/gef/archive/2007/20070316-Fri.html |    access-date  =  June 14, 2022 |      archive-url  =  https://web.archive.org/web/20070705213834/http://www.rgemonitor.com/blog/roubini/184125   |  archive-date  = July 5, 2007 |author-link= Stephen S. Roach }}</ref><ref>{{cite news|title=Who is to Blame for the Mortgage Carnage and Coming Financial Disaster? Unregulated Free Market Fundamentalism Zealotry |author= Roubini, Nouriel | work = RGE Monitor |date=March 19, 2007 |url=http://www.rgemonitor.com/blog/roubini/184125 | format = Blog |url-status=dead |archive-url=https://web.archive.org/web/20070705213834/http://www.rgemonitor.com/blog/roubini/184125 |archive-date=July 5, 2007 |author-link=Nouriel Roubini }}</ref> as well as "engineering" the housing bubble itself.

In 2004, ''[[Businessweek]]'' magazine analysts argued: "It was the Federal Reserve-engineered decline in rates that inflated the housing bubble&nbsp;... the most troublesome aspect of the price runup is that many recent buyers are squeezing into houses that they can barely afford by taking advantage of the lower rates available from adjustable-rate mortgages. That leaves them fully exposed to rising rates."<ref>{{cite web |url=http://www.businessweek.com/magazine/content/04_29/b3892064_mz011.htm |archive-url=https://web.archive.org/web/20040714033738/http://www.businessweek.com/magazine/content/04_29/b3892064_mz011.htm |url-status=dead |archive-date=July 14, 2004 |work= BusinessWeek |date=July 19, 2004 |title=Is A Housing Bubble About To Burst? |author=Coy, Peter |access-date=June 22, 2009|display-authors=etal}}</ref>

In September 2008, [[Joseph Stiglitz]] stated that Greenspan "didn't really believe in regulation; when the excesses of the financial system were noted, (he and others) called for self-regulation—an [[oxymoron]]".<ref>{{cite news|first=Joseph |last=Stiglitz |title=How to Prevent the Next Wall Street Crisis |url= http://www.cnn.com/2008/POLITICS/09/17/stiglitz.crisis/ |work=CNN |date=September 17, 2008}}</ref> Greenspan, according to ''The New York Times'', says he himself is blameless.<ref>{{cite news |first=Jackie |last=Calmes |title=In Washington, Financial Furor Is a First-Rate Chance to Assess Blame |url=https://www.nytimes.com/2008/09/18/business/18cong.html |work=The New York Times |date=September 17, 2008 }}</ref> On April 6, 2005, Greenspan called for a substantial increase in the regulation of [[Fannie Mae]] and [[Freddie Mac]]: "Appearing before the [[United States Senate Committee on Banking, Housing, and Urban Affairs|Senate Banking Committee]], the Fed chairman, Alan Greenspan, said the enormous portfolios of the companies—nearly a quarter of the home-mortgage market—posed significant risks to the nation's financial system should either company face significant problems."<ref>{{cite news| url = https://www.nytimes.com/2005/04/07/business/07fannie.html |work=The New York Times |title=Limits Urged in Mortgage Portfolios |date=April 7, 2005 |first=Stephen |last=Labaton |access-date=June 22, 2009}}</ref> Despite this, Greenspan still claims to be a firm believer in free markets, although in his 2007 biography he wrote, "History has not dealt kindly with the aftermath of protracted periods of low [[risk premium]]s" as seen before the credit crisis of 2008.

In 2009, [[Robert Reich]] wrote that "Greenspan's worst move was to contribute to the giant housing bubble and the worst worldwide crash since the [[Great Depression]]. In 2004 he lowered interest rates to 1%, enabling banks to borrow money for free, adjusted for inflation. Naturally, the banks wanted to borrow as much as they possibly could, then lend it out, earning nice profits. The situation screamed for government oversight of lending institutions, lest the banks lend to unfit borrowers. He refused, trusting the market to weed out bad credit risks. It did not."<ref>{{cite news |url=https://www.theguardian.com/world/2009/jan/17/george-bush-alan-greenspan |title= Alan Greenspan by Robert Reich |first=Robert |last=Reich |date=January 17, 2009 |newspaper=[[The Guardian]] |access-date=April 2, 2012 |location=London}}</ref>

In congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation. ''The New York Times'' wrote, "a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending&nbsp;... Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken". Although many [[Republican Party (United States)|Republican]] lawmakers tried to blame the housing bubble on Fannie Mae and Freddie Mac, Greenspan placed far more blame on Wall Street for bundling subprime mortgages into securities.<ref>{{cite news |url = https://archive.nytimes.com/www.nytimes.com/2008/10/24/business/economy/24panel.html |work=The New York Times |date=October 23, 2008 |title=Greenspan Concedes Error on Regulation |last=Andrews |first=Edmund L. |access-date=February 15, 2025}}</ref>

===2007–2008 financial crisis and the Great Recession===
In March 2008, Greenspan wrote an article for the ''[[Financial Times]]''{{'}} Economists' Forum in which he said that the [[2008 financial crisis]] in the United States is likely to be judged as the most wrenching since the end of [[World War&nbsp;II]]. In it he argued: "We will never be able to anticipate all discontinuities in financial markets." He concluded: "It is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition." The article attracted a number of critical responses from forum contributors, who, finding causation between Greenspan's policies and the discontinuities in financial markets that followed, criticized Greenspan mainly for what many believed to be his unbalanced and immovable ideological suppositions about global capitalism and free competitive markets. Notable critics included [[J.&nbsp;Bradford DeLong]], [[Paul Krugman]], [[Alice Rivlin]], [[Michael Hudson (economist)|Michael Hudson]], and [[Willem Buiter]].<ref>{{cite web|url=http://blogs.ft.com/wolfforum/2008/03/we-will-never-have-a-perfect-model-of-risk/ |title=We will never have a perfect model of risk |work=Financial Times|last=Greenspan |first=Alan |date=March 17, 2008 |access-date=June 22, 2009}}</ref>

Greenspan responded to his critics in a follow-up article in which he defended his ideology as applied to his conceptual and policy framework, which, among other things, prohibited him from exerting real pressure against the burgeoning housing bubble or, in his words, "leaning against the wind". Greenspan argued, "My view of the range of dispersion of outcomes has been shaken, but not my judgment that free competitive markets are by far the unrivaled way to organize economies". He concluded: "We have tried regulation ranging from heavy to central planning. None meaningfully worked. Do we wish to retest the evidence?"<ref>{{cite web|url=http://blogs.ft.com/wolfforum/2008/04/alan-greenspan-a-response-to-my-critics |title=A response to my critics |work= Financial Times|last=Greenspan |first=Alan |date=April 6, 2008 |access-date=June 22, 2009}}</ref> ''Financial Times'' associate editor and chief economics commentator [[Martin Wolf]] defended Greenspan primarily as a scapegoat for the market turmoil. Several notable contributors in defense of Greenspan included [[Stephen S. Roach]], [[Allan Meltzer]], and Robert Brusca.<ref>{{cite web |url=http://www.ft.com/cms/s/0/6c50fef0-056a-11dd-a9e0-0000779fd2ac.html |archive-url=https://ghostarchive.org/archive/20221210/http://www.ft.com/cms/s/0/6c50fef0-056a-11dd-a9e0-0000779fd2ac.html |archive-date=December 10, 2022 |url-access=subscription |url-status=live |first=Martin |last=Wolf |title=Why Greenspan Does Not Bear Most of the Blame |work=Financial Times |date=April 8, 2008 |access-date=June 22, 2009}}</ref>

However, an October 15, 2008, article in ''[[The Washington Post]]'' analyzing the origins of the economic crisis claims that Greenspan vehemently opposed any regulation of [[Derivative (finance)|derivatives]], and actively sought to undermine the office of the [[Commodity Futures Trading Commission]] when the commission sought to initiate regulation of derivatives. Meanwhile, Greenspan recommended improving mark-to-market regulations to avoid having derivatives or other complex assets marked to a distressed or illiquid market during times of material adverse conditions seen during the late 2000s credit crisis.<ref>{{cite news |title=What Went Wrong |first1=Anthony |last1=Faiola |first2=Ellen |last2=Nakashima |first3=Jill |last3=Drew |url=https://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343.html |date=October 15, 2008 |newspaper=The Washington Post |page=A01 |name-list-style=amp}}</ref>

Greenspan was not alone in his opposition to derivatives regulation. In a 1999 government report that was a key driver in the passage of the [[Commodity Futures Modernization Act of 2000]]—legislation that clarified that most [[Over-the-counter (finance)|over-the-counter]] derivatives were outside the regulatory authority of any government agency—Greenspan was joined by Treasury Secretary [[Lawrence Summers]], [[U.S. Securities and Exchange Commission|Securities and Exchange Commission]] Chairman [[Arthur Levitt]], and Commodity Futures Trading Commission Chairman William Ranier in concluding that "under many circumstances, the trading of financial derivatives by eligible swap participants should be excluded from the CEA" ([[Commodity Exchange Act]]). Other government agencies also supported that view.<ref name=PWG>{{cite report |first1=Lawrence |last1=Summers |first2=Alan |last2=Greenspan |first3=Arthur |last3=Levitt |first4=William |last4=Ranier |title= Over-the-Counter Derivatives Markets and the Commodity Exchange Act: Report of The President's Working Group on Financial Markets |date=November 1999 |url= http://www.ustreas.gov/press/releases/reports/otcact.pdf |access-date=August 15, 2009 |archive-url=https://web.archive.org/web/20090825004934/http://www.ustreas.gov/press/releases/reports/otcact.pdf |archive-date=August 25, 2009 |url-status=dead}}</ref>

In Congressional testimony on October 23, 2008, Greenspan acknowledged that he was "partially" wrong in opposing regulation and stated "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity—myself especially—are in a state of shocked disbelief."<ref>{{cite news |last1=Felsenthal |first1=Mark |title=Greenspan "shocked" at credit breakdown |url=https://www.reuters.com/article/uk-financial-greenspan-idUKTRE49M5SJ20081023 |access-date=June 14, 2022 |work=Reuters |publisher=Thomson Reuters |date=October 23, 2008 |archive-url=https://web.archive.org/web/20220614182437/https://www.reuters.com/article/uk-financial-greenspan-idUKTRE49M5SJ20081023 |archive-date=June 14, 2022 |location=[[City of London]] |format=Report on meeting of Committee on Oversight and Government Reform |quote=said he was "partially" wrong to resist regulation of some securities}}</ref><ref>{{cite web|url=http://www.abc.net.au/news/2008-10-24/greenspan-admits-some-guilt-over-financial-crisis/551992|title=Greenspan admits some guilt over financial crisis|work=[[ABC News (Australia)|ABC News]]|date=October 24, 2008|access-date=December 10, 2017}}</ref> Referring to his free-market ideology, Greenspan said: "I have found a flaw. I don't know how significant or permanent it is. But I have been very distressed by that fact." When Representative [[Henry Waxman]] (D-CA) pressed him to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said. "Absolutely, precisely", Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."<ref name="NYT">{{cite news |url= https://economix.blogs.nytimes.com/2008/10/23/greenspans-mea-culpa/|title=Greenspan's Mea Culpa |work=The New York Times |first= David |last= Leonhardt |date=October 23, 2008 |access-date=June 22, 2009 |archive-url=https://web.archive.org/web/20090621063537/https://economix.blogs.nytimes.com/2008/10/23/greenspans-mea-culpa/ |archive-date=June 21, 2009 |url-status=live|author-link=David Leonhardt }}</ref> Greenspan admitted fault<ref name="The Monthly">{{cite web |url=http://themonthly.com.au/node/1785/page/1 |title=Comment: The Corporate Fallacy |work= The Monthly |first=Noel |last=Pearson |date=July 2009}}</ref> in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.

[[Matt Taibbi]] described the [[Greenspan put]] and its bad consequences saying: "every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over", thereby making it "almost impossible" for the banks to lose money.<ref>{{cite web|url=http://www.democracynow.org/blog/2011/2/22/matt_taibbi_why_isnt_wall_street_in_jail|title=Matt Taibbi: "Why Isn't Wall Street in Jail?" (Complete Interview) |date=February 22, 2011 |work=[[Democracy Now!]] |access-date=May 20, 2011 |archive-url=https://web.archive.org/web/20110518172718/http://www.democracynow.org/blog/2011/2/22/matt_taibbi_why_isnt_wall_street_in_jail |archive-date=May 18, 2011 |url-status=live}}</ref> He also called Greenspan a "classic [[Confidence trick|con man]]" who, through political savvy, "flattered and bullshitted his way up the [[Matterhorn]] of American power and&nbsp;... jacked himself off to the attention of Wall Street for 20 consecutive years".<ref name="taibbi">{{cite book |first=Matt |last=Taibbi |author-link=Matt Taibbi |title=Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America |publisher=[[Spiegel & Grau]] |year=2010 |pages=[https://archive.org/details/griftopiabubblem0000taib/page/35 35–36] |isbn=978-0-385-52995-2 |title-link=Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America }}</ref>

In the documentary film ''[[Inside Job (2010 film)|Inside Job]]'', Greenspan is cited as one of the persons responsible for the [[2008 financial crisis]]. He is also named in [[Time (magazine)|''Time'' magazine]] as one of the "25 People to Blame for the Financial Crisis".<ref>{{cite magazine |url=http://www.time.com/time/specials/packages/completelist/0,29569,1877351,00.html |archive-url=https://web.archive.org/web/20090414072623/http://www.time.com/time/specials/packages/completelist/0,29569,1877351,00.html |url-status=dead |archive-date=April 14, 2009 |magazine=[[Time (magazine)|Time]] |title=Complete List&nbsp;– 25 People to Blame for the Financial Crisis |access-date=May 1, 2013}}</ref>

===Political views and alleged politicization of office===
Greenspan describes himself as a "lifelong [[libertarian Republican]]".<ref name="TurbWSJ" /> Some [[Free market|free-market]] critics argue that Greenspan abandoned his libertarian ideals as [[Chair of the Federal Reserve|Federal Reserve Chair]]. Greenspan was once a proponent of [[Hard currency|sound money]] and [[limited government]] but later backed policies that countered these principles such as prolonged artificially low interest rates.<ref>{{Cite web |date=2018-03-21 |title=The Fed’s Faustian Bargain - WSJ |url=https://web.archive.org/web/20180321070425/https://www.wsj.com/articles/the-feds-faustian-bargain-1449445232 |access-date=2025-05-05 |website=web.archive.org}}</ref>{{sfn|Greenspan|2007|p=}}{{pn|date=May 2025}} Critics argue that these policies contributed to [[Economic bubble|asset bubbles]] and [[moral hazard]].<ref>{{Cite book |last=Fleckenstein |first=William A. |url=https://archive.org/details/greenspansbubble0000flec |title=Greenspan's bubbles : the age of ignorance at the Federal Reserve |date=2008 |publisher=New York : McGraw-Hill |others=Internet Archive |isbn=978-0-07-159158-4}}</ref><ref>{{Cite book |last=Woods |first=Thomas E. |url=https://archive.org/details/MeltdownAFreeMarketLookAtWhyTheStockMarketCollapsed.--ThomasE.Woods/page/n17/mode/2up |title=Meltdown A Free Market Look At Why The Stock Market Collapsed |language=English}}</ref>

In March 2005, in reaction to Greenspan's support of President [[George W. Bush]]'s plan to [[Social Security debate (United States)|partially privatize]] [[Social Security (United States)|Social Security]], then-Democratic Senate Minority Leader [[Harry Reid]] attacked Greenspan as "one of the biggest political hacks we have in Washington"<ref name="Inside"/><ref name="washtime"/> and criticized him for supporting Bush's 2001 tax cut plan.<ref name="Andrews"/> Then-Democratic House Minority Leader [[Nancy Pelosi]] added that there were serious questions about the Fed's independence as a result of Greenspan's public statements.<ref>{{cite news |url=https://www.foxnews.com/story/transcript-nancy-pelosi-on-fox-news-sunday |title=Transcript: Nancy Pelosi on 'FOX News Sunday' |work=Fox News |date=March 6, 2005 |access-date=June 22, 2009 |archive-url=https://web.archive.org/web/20090727180040/http://www.foxnews.com/story/0,2933,149556,00.html |archive-date=July 27, 2009 |url-status=live}}</ref> Greenspan also received criticism from Democratic Congressman [[Barney Frank]] and others for supporting Bush's Social Security plans favoring private accounts.<ref>{{cite news |url=https://www.foxnews.com/story/greenspan-supports-ownership-concept-in-social-security |title=Greenspan Supports 'Ownership' Concept in Social Security |work=Fox News |date=February 17, 2005 |access-date=June 22, 2009 |archive-url=https://web.archive.org/web/20090728051810/http://www.foxnews.com/story/0,2933,147972,00.html |archive-date=July 28, 2009 |url-status=live}}</ref><ref>{{cite news |url=https://www.washingtonpost.com/wp-dyn/articles/A5396-2005Mar3.html |title=Senate Democratic Leader Blasts Greenspan |newspaper= The Washington Post |first=Dan |last=Balz |date=March 4, 2005 |page=A06 |access-date=June 22, 2009}}</ref><ref>{{cite news |url=http://blogs.abcnews.com/politicalpunch/2008/10/barney-frank-sa.html |title=Barney Frank Says Race a Factor in Subprime Blame Game |work=Political Punch |first=Jake |last=Tapper |date=October 7, 2008 |publisher=ABC News |access-date=June 22, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20091108150044/http://blogs.abcnews.com/politicalpunch/2008/10/barney-frank-sa.html |archive-date=November 8, 2009}}</ref> Greenspan had said Bush's model has "the seeds of developing full funding by its very nature. As I've said before, I've always supported moves to full funding in the context of a private account".<ref>{{cite news |url=http://seniorjournal.com/NEWS/SocialSecurity/5-02-16GreenspanSays.htm |title=Greenspan Likes Social Security Private Accounts, But Urges Caution |publisher=Senior Journal |date=February 17, 2005 |access-date=June 22, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20090727000810/http://seniorjournal.com/NEWS/SocialSecurity/5-02-16GreenspanSays.htm |archive-date=July 27, 2009}}</ref>

Others, like Republican Senator [[Mitch McConnell]], disagreed that Greenspan was too deferential to Bush, stating that Greenspan "has been an independent player at the Fed for a long time under both parties and made an enormous positive contribution".<ref>{{cite news |url=https://www.nbcnews.com/id/wbna7108135 |work=Meet the Press |title=Transcript for March&nbsp;6 |publisher=NBC News |date=March 6, 2005 |access-date=June 22, 2009}}</ref>

Economist Paul Krugman wrote that Greenspan was a "three-card maestro" with a "lack of sincerity" who, "by repeatedly shilling for whatever the Bush administration wants, has betrayed the trust placed in the Fed chairman".<ref>{{cite news |url=https://www.nytimes.com/2005/02/18/opinion/18krugman.html |title=Three-card Maestro |first=Paul |last=Krugman |work=The New York Times |date=February 18, 2005 |access-date=November 10, 2007}}</ref>

Republican Senator [[Jim Bunning]], who opposed Greenspan's fifth reconfirmation, charged that Greenspan should comment only on monetary policy, not fiscal policy.<ref name="bloom">{{cite news |url=https://www.bloomberg.com/apps/news?pid=10000087&sid=aRR5whQ7nGvE&refer=top_world_news |title=Greenspan Says U.S. Must Adjust Retirement Programs (Update1) |date=August 27, 2004 |publisher=Bloomberg L.P. |access-date=October 26, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20050921152916/http://www.bloomberg.com/apps/news?pid=10000087 |archive-date=September 21, 2005}}</ref><ref>{{cite news |title='Stark' budget choices |url=https://www.chicagotribune.com/news/ct-xpm-2004-08-28-0408280145-story.html |access-date=June 14, 2022 |work=Chicago Tribune |agency=[[Bloomberg News]] |publisher=Tribune Publishing |date=August 28, 2004 |quote=If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels...}}</ref> Greenspan had used his position as Fed chairman to comment upon fiscal policy as early as 1993, however, when he supported [[Omnibus Budget Reconciliation Act of 1993|President Clinton's deficit reduction plan]], which included tax increases and budget cuts.{{Sfn|Woodward|2000|p=110}}

In an October 2011 lecture addressing the [[Occupy movement]],<ref>{{cite book |last=Chomsky |first=Noam |title=Occupy |year=2012 |location=London |isbn=978-0-241-96401-9 |pages=33–34 |publisher=Penguin |author-link=Noam Chomsky}}</ref> [[Noam Chomsky]] characterized portions of Greenspan's February 1997 testimony to the U.S. Senate as an example of the self-serving attitudes of the so-called 1%. In that testimony, Greenspan had stated that growing worker insecurity is a significant factor keeping inflation and inflation expectation low, thereby promoting long-term investment.<ref>{{Cite web|url=https://www.federalreserve.gov/boarddocs/hh/1997/february/testimony.htm|title=FRB: Testimony, Greenspan&nbsp;– Humphrey-Hawkins&nbsp;– February 26, 1997|website=www.federalreserve.gov|access-date=January 25, 2017}}</ref>