Alan Greenspan thought when he stepped down as Chairman of the Federal Reserve that his place and name in economic history had been preserved, as he presumably had overseen the longest uninterrupted period of economic growth in the modern history of America.

Now that many people have put a magnifying glass on his performance, that legacy is not only no longer ensured, it’s in danger of completely crumbling, as he is now being considered by many economists of being the one who sowed the seeds which resulted in this current economic crisis, which is the worst since the Great Depression.

To that end, Greenspan has been running around trying to shore up his reputation by defending his actions.

His latest talk was with the BBC, where he said there’s no doubt there will be another global financial crisis. His reasoning? Greenspan asserted it’s “…the unquenchable capability of human beings when confronted with long periods of prosperity to presume that that will continue.”

Incredibly, Greenspan added that while every financial crises are unique, they have one foundational cause: “… human beings begin to take speculative excesses with the consequences that have dotted the history of the globe basically since the beginning of the 18th and 19th century.”

I say incredibly because I know Alan Greenspan’s economic journey, and he didn’t start off as a Keynesian, rather he had a strong leaning toward Austrian economics; which opposes almost everything he did during his reign at the Federal Reserve. Greenspan knows when he says that human nature caused the problem, while not completely false, it’s the enablement of that human nature by Alan Greenspan and his ilk that has been the real constant, fundamental cause of the booms and busts that will continue until the Federal Reserve is dealt with on a permanent basis.

Alan Greenspan doesn’t mention that his easy credit policies from low interest rates encouraged those “speculative excesses,” by buying new cars and homes which they normally would never had been able to afford.

What consumers in America looked at was their budget and whether they could take on that new debt, not whether anything could happen that could disrupt their ability to pay that debt, which is part of what this current economic crisis is all about.

So the speculative excesses referred to by Greenspan came directly from his enabling of American consumers to buy cars and houses based on their monthly budget parameters, which looked good to them. All along Greenspan knew that there would be an eventual bursting of the bubble he had created, and now he’s blaming human nature and Americans for his faulty policies.

For years a number of economists warned of Greenspans’ policies, but unfortunately mainstream media doesn’t listen to non-Keynesian economists, so they continue to report from the flawed practices of those that implement Keynesian policies in American money management.

This is another reason the economic crisis is nowhere near over, as we have barely started dealing with the resets of Alt-A loans, which will surge over the next couple of years. People took on these loans because of easy credit and low interest rates, assuming the housing bubble was going to go on forever, and the value of their houses would increase so it would be easy to refinance when the resets were triggered. Now that their homes are worth less than when they bought them, they aren’t able to handle the resets, which are required by law. There will be mass defaults on these loans going forward as a result of this.

Human nature isn’t the problem of economic crises over the decades, it’s the Federal Reserve and its relentless, misguided policies which are behind the ongoing boom and bust periods, and until that changes, we will truly always have these types of crises come and go.

In the case of the current one, Alan Greenspan shares as much blame as Ben Bernanke, and even more, as he’s thoroughly acquainted and has knowledge of the damage the Federal Reserve policies generate, and he still implemented them in spite of that. In my thinking, that makes him more responsible and accountable than anyone else for this crisis that still has yet to be determined on how deep and long it will go.

In the case of Alan Greenspan’s legacy, it will never be what he had hoped it will be, although once the particular crisis is over, there will be attempts by him and those wanting to perpetuate the existing Federal Reserve policies, to shift the blame from them to anyone else they can find in order to take the spotlight off of themselves. I no longer think that strategy will work, and hopefully consumers and those that have interest in genuine and lasting change will read Ron Paul’s “End the Fed” and books on Austrian Economics to get another side of what economic policies could be.