What, exactly, did you get paid for?

One of my favorite blogs, as you see linked to the left, is The Mess That Greenspan Made by Tim Iacono. He's even got the perfect subhead: How Eighteen Years of Easy Money Changed the World.

Well, today was Tim's day, because Gollum... erm, Greenspan finally got called to the carpet by Henry Waxman and the House Committee on Oversight and Government Reform. And by the end of the session, it was stained with Greeny's blood. To wit:

Greenspan told the House Oversight Committee that his belief that banks would be more prudent in their lending practices because of the need to protect their stockholders had been proven wrong by the current crisis. He called this a "mistake" in his views and said he had been shocked by that.

Greenspan said he had made a "mistake" in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions.

Greenspan called this "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."

Greenspan is 82 years old and, apparently, utterly devoid of common sense. This is the equivalent of a teacher putting the bully in charge of class, then looking back and saying "I figured he would have been fair and impartial!" And it's not like there was any lack of direct precedent for him to draw upon. A simple look at what happened in South America in the 1970s and 80s shows that a concentration of wealth, massive inflation and a prolonged recession are all absolutely inevitable in the wake of mass deregulation. Any dilettante knows this, but somehow Gollum didn't.

Waxman was having none of it.

House Oversight Committee Chairman Henry Waxman said that he believed that the Federal Reserve, which regulates banks, the SEC and the Treasury had all played a role in contributing to the mistakes.

"The list of mistakes is long and the cost to taxpayers is staggering," Waxman, D-Calif., told the three men. "Our regulators became enablers rather than enforcers. Their trust in the wisdom of the markets was infinite. The mantra became that government regulation is wrong. The market is infallible."

And that's the bottom line: People who think the market will regulate itself are either stupid or evil. This is the most important message here, and this is what everyone living through this time must remember - the market never regulates itself, and folks who say it's a good model to try it are only after easy, borderline illegal money and the continued stratification of the classes.

If someone says "deregulate," they're really saying "let's steal from the working and middle class." Remember that.