Even Alan Greenspan is a Keynesian now

In an interview with the Financial Times, former Federal Reserve Chairman Alan Greenspan officially came out in favor of temporary bank nationalization as a possible solution to the current economic crisis:

It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring. I understand that once in a hundred years this is what you do.”

This is a big admission for Greenspan. But it seems as if the erstwhile devotee of Ayn Rand has been reassessing his ideas as of late. This past October, during testimony for the House Committee on Oversight and Government Reform, Greenspan said,

This modern risk-management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year.”

Well, as Martin Wolf recently wrote in FT, “We are all Keynesians now” — even the high priest of neoliberal economics himself. It’s a new day.

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