Last night, the Financial Times ran an op-ed from Alan Greenspan, former Chairman of the Federal Reserve. It starts out pretty dry. Greenspan argues, in effect, that the Dodd-Frank financial regulation act is a bad idea, because 21st-century financial systems are really, really complicated. Greenspan also complains that "regulators are being entrusted with forecasting, and presumably preventing, all undesirable repercussions that might happen to a market when its regulatory conditions are importantly altered." This is an impossible task, says Greenspan. We should just leave it up to the free market, because "with notably rare exceptions (2008, for example), the global 'invisible hand' has created relatively stable exchange rates, interest rates, prices, and wage rates."
What? The Internet has zeroed in on that last statement--"with notably rare exceptions (2008, for example)." Floyd Norris at The New York Times jokes that it's like "a defense lawyer arguing that while his client may have committed a few murders on one particular day, his conduct on all the other days of his life had been exemplary." Paul Krugman, also at the Times, says that Greenspan is apparently trying to "cement his reputation as the worst ex-Fed chairman in history."
Henry Farrell, blogging at Crooked Timber, tries to give Greenspan the benefit of the doubt: "It's best not to interpret this as an empirical claim, but a carefully-thought-out bid for Internet immortality." Farrell adds his own spin on the rare-exceptions construction--"With notably rare exceptions, Russian Roulette is a fun, safe game for all the family to play"--and then throws the floor open to commenters. They oblige him: "With notably rare exceptions, Germany remained largely at peace with its neighbors during the 20th century." "With notably rare exceptions, Mrs. Lincoln enjoyed the play."
Financial Times, eager to play along, has already made a contest calling for the best finance-themed "notable exceptions" jokes. "You know: 'With notably rare exceptions, Mr Madoff is good with money' kind of thing," writes Joseph Cotterill. "Keep 'em clean," he adds, as though it were possible to make a dirty joke about regulatory capital standards.
This is all good fun, but a few people have more substantive critiques of Greenspan's argument. Yves Smith at Naked Capitalism offers a lengthy takedown of Greenspan--particularly the part where Greenspan warns that Dodd-Frank will send financial firms scurrying overseas, which Smith calls "disingenuous and boneheaded." Meanwhile, Kevin Drum at Mother Jones reminds readers that "2008 is hardly the only notable exception to global economic stability since the globalization and deregulation of finance began in earnest three decades ago."
Norris at the Times rolls his eyes at Greenspan's excuse-making: "Alan Greenspan is back, lecturing the regulators that they can't possibly hope to do the jobs the Dodd-Frank law assigned to them ... In other words, the fact that he completely failed to do his job--and in the process brought on a financial crisis whose effects are still felt--is ample evidence that it is futile to try to do the job at all." And Dean Baker at Business Insider simply notes that "we have 25 million people who are unemployed, under-employed or have given up looking for work altogether because Alan Greenspan did not understand financial markets and the economy."