Greenspan - Financial Crisis By Far Worst in History

Former Fed Chairman Alan Greenspan said today that the current financial crisis is 'by far' the worst in history. Speaking at the Credit Union National Association’s Governmental Affairs Conference in Washington, he said that the current crisis has potentially worse consequences than the Great Depression because of the almost total withdrawal of short term credit. The recovery is being led by high income individuals who have benefited from rising stock prices.

It's easy to mock Greenspan since he was at the helm when much of the crisis gathered steam but he still understands the global economy better tham most. I think he's now tilted a bit too far, being overly pessimistic when he used to be gung-go optimistic. The economy is sucking wind and will do so for some time, potentially many years. But unlike the Great Depression, unemployment is below 20% and will probably stay in the 10% range for some time.

My biggest fear, which I expressed in an article I wrote today, is that we are in for Japan-style 20 year stretch of low growth, low rates, and stagnation.