ANOTHER WINGNUT MEME TAKES A HIT FROM GREENSPAN

When there's a discussion about the role of government in the economy, the wingnuts often say that the government never does anything right so it should stay out of economic issues. In his congressional testimony, Alan Greenspan rebuts that claim:

GREENSPAN: If I may just add a word or two. I think that it's interesting to observe that we find failures of regulation all the time. And one of the reasons is a very significant amount of regulation in the economic area is based on a forecast, to know in advance whether or not particular products will go bad or whether the cycle will turn.

If we are right 60 percent of the time in forecasting, we're doing exceptionally well. That means we are wrong 40 percent of the time. And when you observe the extent of the broad failure, the difficulty is that nobody can forecast. And if you try to take a look at what the private sector does, it's precisely the same thing that goes on in government.

We at the Federal Reserve had a much better record forecasting than the private sector, but we were wrong quite a good deal of the time. And that was reflected in how one views what the appropriate regulatory authorities are. Because until you -- unless you can anticipate the types of problems that are going to happen, it's very difficult to know what to do. And I think that's the problem that this type of thing confronts.

And I don't see any way in which that's going to be fundamentally changed. We can try to do better, but forecasting is never -- it never gets to the point where it's 100 percent accurate.