Greenspan, Derivatives and the Financial Crisis

Alan Greenspan, the former US Federal Reserve Chairman, consistently opposed the oversight and regulation of financial contracts, known as derivatives, by the US Congress and regulatory institutions in the United States. On the other hand, American investor, Warren E. Buffett and American financial speculator, George Soros, do not like using derivatives in their businesses.

As per the New York Times article, "Taking Hard New Look at a Greenspan Legacy", and I quote, "If Mr. Greenspan had acted differently during his tenure as Federal Reserve chairman from 1987 to 2006, many economists say, the current crisis might have been averted or muted."

This New York Times article highlights the problems that arise when we fail to question authority and those in power. Putting our blind faith in others and following them meekly should be a no-no. This financial crisis reminds me of the proverbial saying, "the love of money is the root of all evil." Greenspan would have done well to remember this. Strangely, Greenspan was often referred to as the "Oracle" in many circles.