06 Dec 2009 Prem Watsa on what comes next ( Portfolio )
The Greenspan policy was part of the problem. If Paul Volcker had been chairman of the U.S. Federal Reserve would this have happened? Not likely. He would have put interest rates up in 1996 when Greenspan warned about "irrational exuberance" and the tech bubble. Mr. Volcker would have let Long Term Capital Management go bust, raised interest rates and we never would have been in this current situation. The financial collapse happened because we had 20 years of boom time, and bubbles, without any significant recession.