Alan Greenspan Is Living In Dreamland

All of us go back for a long way, always understood that there's a lot of irrational exuberance and fear and all of those various aspects of human nature affecting the GDP and the market and everything else. But we all assumed, and in fact it's almost general, that those were random and that they would essentially wash out. And therefore you could set up your econometric models - or any model you want - looking only at the effects of people acting rationally in their long-term self-interest. And that was a general proposition - and that is what they were teaching in the universities. And that's basically what economics was all about going all the way back into the last two centuries ago.