Alan Greenspan Working as an Advisor for Paulson & Co? That's Just Wrong

Of all of the thousands of hedge funds that Alan Greenspan could have taken an advisory position with, he had to choose Paulson & Co., the hedge fund that made billions and billions of dollars in 2007 betting against the US housing market?

Alan Greenspan, one of the chief architects of the housing boom (which is now deflating at an alarming rate), working at a firm which is still actively placing bets against the US economy and being very public about it?

It just seems like a very strange choice to me. I understand that Alan Greenspan served for many years and deserves his chance to make money in the private sector. The problem I have is that Greenspan already works for Pimco and Deutsche Bank, and presumably makes buckets of money on the speech circuit. Why sully your legacy by taking this advisory role? Either he: a) doesn't care about his legacy or b) didn't really think this through. Maybe he wasn't aware that Paulson & Co had been aggressively betting against the US housing market, especially the subprime mortgage index? Maybe he didn't do his due diligence? It's a possibility, but I doubt it. I am sure that Greenspan has people that advise him on such things who did a thorough screening of Paulson & Co.

Many people blame Greenspan for the current mess that we are in. They say that interest rates were far too low in the first part of this decade, and that created the massive housing bubble that started in 2001 and peaked in 2005. So for Greenspan to take a position at a firm that made so much money profiting from the bursting of the housing market bubble seems questionable to many. At the very least, the accepting of this position is in bad taste (in my opinion.)

Like I said, Greenspan served as the Chairman of the Federal Reserve for almost twenty years and should be able to work wherever he wants to in the private sector. However, he obviously wasn't thinking about his image when he accepted this job at Paulson & Co. Maybe they offered him a pile of money and he suddenly succumbed to some "irrational exuberance" of his own.

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