Market Still Has Lovin' Feeling for Greenspan

Monday, President Bush talked about the "hangover" from the "economic binge" of the 1990s. Tuesday, the man who presided over that binge spoke before Congress and, for some reason, investors took comfort in his testimony.

For some time now (and long before it was fashionable), this column has been critical of Federal Reserve Chairman Alan Greenspan for having created the environment in which the stock market's bubble erupted; specifically, by engineering the bailout of Long Term Capital Management in 1998 and by turning on the liquidity spigots in late 1999 ahead of the much ballyhooed "Y2K" calendar change.

In 1996 Greenspan famously talked about "irrational exuberance" but uttered nary a cautionary public statement thereafter, despite the stock market's volcanic eruption in the last years of the decade. (In the context of corporate malfeasance, Greenspan talked Tuesday about a "once-in-a-generation frenzy of speculation that is now over," which is as close as he's come to saying publicly: "It was a bubble, it's over.") ...