In his book The Age of Turbulence, former Fed chief Alan Greenspan proclaimed that subprime was a good thing for America. "The gains were especially dramatic among Hispanics and blacks, as increasing affluence as well as government encouragement of subprime mortgage programs enabled many members of minority groups to become first-time home buyers. This expansion of ownership gave more people a stake in the future of our country and boded well for the cohesion of the nation".

Now the high priest of the markets has conceded he made a mistake: the free market does not protect society. "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms"

It really beggars belief. As Tom Rutten in the Los Angeles Times notes, did he really expect that banks, brokerages, rating agencies and insurance companies when presented with the chance to make a killing would put the interests of investors and society ahead of their own? And that shows that Greenspan is ideologically bankrupt. "Countries - like companies - that cling to notions that allow some to pursue their own interests by behaving indecently toward others come to bad ends."

The problem is that Greenspan was completely blinded, and ultimately blind-sided, by his ideology. As MarketWatch points out, that's not ideology, it's zealotry.