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Chairman Waxman. Dr. Greenspan, The question I had for you is you had an ideology. You had a belief that free, competitive--and this is shown--your statement, "I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We have tried regulation, none meaningfully worked".

That was your quote. You have the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others.

Now, our whole economy is paying its price. You feel that your ideology pushed you to make decisions that you wish you had not made?

Mr. Greenspan. Well, remember, though, [what an] ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to. To exist, you need an ideology.

The question is, whether it ... is accurate or not. What I am saying to you is, yes, I found a flaw, I don't know how significant or permanent it is, but I have been very distressed by that fact. But if I may, may I just finish an answer to the question----

Chairman Waxman. You found a flaw?

Mr. Greenspan. I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

Chairman Waxman. In other words, you found that your view of the world, your ideology, was not right, it was not working.

Mr. Greenspan. Precisely. That's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.

-- Federal Reserve chair Alan Greenspan being questioned by the chair of the House Oversight Committee, Henry Waxman in October 2008. The Financial Crisis And The Role Of Federal Regulators: Hearing Before The Committee On Oversight And Government Reform. House Of Representatives, One Hundred Tenth Congress, Second Session, October 23, 2008, Serial No. 110-209 http://www.gpo.gov/fdsys/pkg/CHRG-110hhrg11055764/html/CHRG-110hhrg11055764.htm
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