to our economic problems, domestically and internationally.
In an amazing “mea culpa” testimony before Congress on October 23, 2008 Alan Greenspan admitted that he had overestimated the ability of free financial markets to self-correct and he had entirely missed the possibility that deregulation could unleash such a destructive force on the economy Greenspan then admitted “I still do not fully understand why it happened, and obviously to the extent that I figure it happened and why, I shall change my views”
Greenspan, Bernanke and all OCET economists explain the 2007-2008 collapse of the investment banks and the shadow banking system to the “mispricing of [probabilistic] risk”. In the first decade of the 21 century the bankers were utilizing some variant of “risk management” models developed by Nobel Prize winning economists (as Greenspan noted in his testimony). –despite the fact that Novel Laureate Scholes’ model had helped to create the collapse of Long Term Capital Management in the late 1990s.