Alan Greenspan testified before the House Committee on Oversight and Government Reform today. According to this article from Bloomberg, Greenspan conceded that his market ideology was "flawed" and that the current financial crisis resulted from a lack of government oversight. That is like an arsonist telling the police and the building owner that the damage wouldn't have been so great if the police had installed more fire suppression devices. What's worse, these metaphorical police GAVE an unlimited amount of gasoline to the arsonist, because it would help keep more firemen fully employed.
The real cause of the current financial crisis is government intervention into the market, not lack of government "regulation". The government incentivized (even intimidated) financial institutions to take on risky investments. For an explanation of this, see George Reisman's excellent essay, "The Myth that Lassaiz Faire is Responsible for Our Current Crisis."
