Alan Greenspan: Arsonist and fireman

Bloomberg reports on a another "Greenspan mess" sighting (hat tip CB) as yet another sensible economist emerges and will be duly added to the small (but growing) list of TMTGM approved dismal scientists.

It seems Patrick Artus, of Natixis SA in France fancies the former Fed chief as the wearer of two hats - arsonist and fire fighter - and, overall, a very bad Fed chairman.

Alan Greenspan, who led the U.S. Federal Reserve for 18 years and was revered in the financial markets, was a "very bad" Fed chairman.

That's the blunt verdict of Patrick Artus, chief economist of Natixis SA and one of France's most listened-to pundits: He is an economic adviser to the French government.

In his latest book ("Les incendiaires: Les banques centrales depassees par la globalisation" or the "Arsonists: Central Banks Overtaken by Globalization"), Artus, 56, blames Greenspan and other central bankers for being so focused on inflation that they failed to prevent real-estate and stock-market bubbles which, in turn, burst and caused pain.

Artus joined me for a candid telephone conversation.
...
Nayeri: Joseph Stiglitz went on the record on Nov. 16 as saying that Greenspan had "made a mess" and that the U.S. now faced a recession. Do you agree?

Artus: Yes. Greenspan was an arsonist and a fireman combined. He derived all his glory from his reaction to the savings-and- loans crisis, to the collapse of Long-Term Capital Management LP, and to Sept. 11, 2001. But LTCM and the savings-and-loans crisis were his doing. He absolutely failed to see where the malfunctions in the U.S. economy were.

Greenspan came up with a phrase, "irrational exuberance,"in 1997, but he didn't do anything about it.
...
He had no vision of what was dangerous. Today, we're destroying the world banking system with this subprime crisis.

Some economists are getting a lot smarter these days - or so it seems.