There is a certain sense of deja vu watching US Federal Reserve chairman Ben Bernanke pump more liquidity into the US market to try and keep it afloat.

In his damning book, Greenspan's Bubbles, William Fleckenstein accuses his predecessor of blowing two asset bubbles. He says that the subprime mortgage crisis is Greenspan's legacy.

"Greenspan bailed out the world's largest equity bubble with the world's largest real estate bubble. That combination easily equates to the biggest orgy of speculation and debt creation in the United States (and the world) has ever seen. Unfortunately, Greenspan's legacy will not just be those two bubbles, their attendant busts, and the trillions of dollars of debt left in their wake. Operation Enduring Bubble - what I call Greenspan's monetary and interest rate decisions that created the real estate bubble also exacted a heavy toll on the dollar.''

Greenspan, according to Fleckenstein, routinely suppressed the forces of creative destruction that come with every market. By slashing interest rates and keeping them low for too long, and by pumping in money, he ensured there was a loss of fear which meant that the normal risk reduction response that most business people have to periodic pain never occurred. It left the US swimming in an ocean of debt that has been ratcheting higher.

According to Fleckenstein, Greenspan couldn't see the tech bubble because he was mesmerized by the facade of a technology-driven productivity boom, resulting in a continual cheerleading that encouraged others to make wrong-headed economic and investment decisions.

And, according to Fleckenstein, he championed the technology and financial innovations in the form of derivatives, asset-backed securities, collateralized loan obligations and collateralized mortgage obligations that allowed lending institutions to offer products to people who couldn't get loans before, providing home owners with more money than they could afford to repay.

In this book, Greenspan comes across as someone who is absolutely fixated on his economic theories, and completely blind to his mistakes.

Fleckenstein does not pull his punches. Consider this: "It is oddly ironic that a small group like the Federal Open Market Committee (FOMC), similar to those found at all levels of any former communist regime, would be in charge of the world's largest and most successful capitalist country - that is the United States of America and its $13 trillion economy. Given that human being are not omniscient - and historically central planning committees have been notoriously prone to error - it's easy to imagine that such a group would be far more likely to pick the wrong interest rate than they would be to choose the right one to run an economy. Yet, when these central planners decide they've chosen the wrong rate, for whatever reason, they use the very same process when selecting a new one. It's an impossible job but they seem happy to do it."

No doubt Greenspan's supporters will pick the eyes out of this book, and jump on various claims and assertions. Still, the book does give some perspective as we watch Bernanke come to the rescue of entities that took on excessive risk with the US falling further down the dark tunnel into what many predict could be a long and nasty recession.