Well, first we have Steven Pearlstein’s (WaPo Business Columnist) comments about recent events.

It’s not just about subprime mortgages anymore.

The turmoil we’re witnessing in global financial markets is nothing less than the popping of an enormous credit bubble that built up over the past five years, artificially inflating the market prices of stocks, bonds and real estate. It created a bonanza for Wall Street investment houses and private-equity funds and fueled the longest and strongest period of global economic growth in modern history.

While this characterization is generally accurate, it is FAR too limited.

I would refer you to an analysis of Greenspan’s tenure in the European Tribune post which is in turned based on an editorial from the Financial Times (subscription, which I do not have, required) calling Greenspan a “a serial inflationist, willing to slash interest rates to bail out investors who should not need rescuing from themselves”, while doing his best to keep wages low.

Such is to be expected for one who was a confidant of Ayn Rand. For her, wage earners are weak people, and the indivicualist capitalists are all that is good in society.

This is where Mr. Pearlman is wrong. This has not been going on for 5 years, but closer to 20 years, since Alan Greenspan flooded the market with liquidity to bail out those who were caught in the 1987.

In fact, it’s deeper than that, as evidenced by his bailout of Long Term Capital Management, where a less lucrative market driven buyout was sabotaged.

Alan Greenspan was the most enthusiastic cheerleader of bailouts for investors, while aggressively working to knock the pins out from stability and protections of ordinary people.

If something big went wrong, he would open the money tsunami, and if something went smaller went wrong, he would arrange for private bailouts.

He has created an economy with very little risk, and the high liquidity has produced very in the way of reasonable returns for conventional financial instruments.

In so doing, he has created a situation where insane levels of risk have become ordinary, and so more people have taken these risks.

Needless there a number of other people bear responsibility, Jimmy Carter, who started the rollback of Depression era regulations, Reagan who accelerated it to alarming (savings and loan debacle) levels, and both Bush I and Clinton have been instrumental in deregulating the economy to a dangerous degree.

That being said, when the meltdown occurs in the next few years, it will be Greenspan, whose policies are most responsible for these problems, who gets the lions share of the blame.