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Greenspan denies role in U.S. policy

Former Fed chairman acknowledges frequent White House visits

Last Updated: Friday, November 6, 2009 | 8:10 PM ET

CBC News

Former U.S. Federal Reserve chairman Alan Greenspan told CBC News Friday he makes regular visits to the Obama White House, but he denied he still influences policy-making.

Greenspan made his remarks in an interview with David Gray of CBC Radio The Homestretch, based in Calgary, in advance of his public-speaking visit to the city on Tuesday.

Critics blame Greenspan's support for bank self-regulation for contributing to the U.S. financial crisis.Critics blame Greenspan's support for bank self-regulation for contributing to the U.S. financial crisis. (CBC)

On the oilsands:

  • "I gather you've had a very small environmental problem up in the fields fairly recently, but I hope that's not an indication that environmental concerns will put a very significant damper on the degree of exploration and development up there.

On oil and the war in Iraq:

  • "If there were no oil under Iraqi sands, Saddam Hussein would never have been heard from. He would never have been able to accumulate the wealth that he did and with that wealth to essentially threaten the Strait of Hormuz [a narrow oil shipping route choke point between the Persian Gulf and Gulf of Oman] and basically his neighbours."

On his role in the U.S. financial crisis:

  • "The critical question here, I would argue, there is no evidence that you actually can foresee these crises. We certainly know when risk is being underpriced, but risk tends to be underpriced often for years. But to distinguish between evaluating when that risk is underpriced and therefore you're essentially in a bubble — it's another way of saying you're in a bubble. It's quite another issue to say when that bubble is going to be pricked. And am I saddened that I couldn't find the point? Not really. If I did, it would have been by luck, and luck is not something you tend depend on."

Gray, noting White House visitor logs show Greenspan has visited the White House six times in the last nine months, asked whether the former central banker was still shaping American fiscal policy.

"I doubt it," replied Greenspan. "These are visits in which I discuss with old friends what I think is going on in the economy of the world. I have my research capabilities, I have a lot of data which no one else has got and they find it of use.

"If you translate that into significant influence on policy being made by the current administration, you would be far off. You would be making a very significant misstatement."

The interview will air in two parts Friday and Monday.

Critics have suggested Greenspan's long-time support for banking self-regulation contributed to the U.S. financial crisis, which he rejected in the interview with Gray.

Greenspan shared that view and, in the wide-ranging interview, addressed environmental activism in the oilsands, and the role of oil in the war in Iraq. (See sidebar.)

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