Greenspan baffled by loan turmoil, cheers new Fed chief

Former Federal Reserve Chairman Alan Greenspan said he "didn't really get" how the boom in subprime lending might hurt the economy, and he endorsed his successor's handling of recent market turmoil, CBS television reported.

Current Fed Chairman Ben S. Bernanke "is doing an excellent job," Greenspan said in the interview on CBS's 60 Minutes, scheduled to air Sunday, the day before his book The Age of Turbulence will be released.

Greenspan, who left the Fed in January 2006, challenged the view among some economists and investors that he would have lowered interest rates to stem the recent decline in credit markets, according to excerpts released by CBS. In 1998, Greenspan's Fed lowered rates three times after a Russian debt default rippled through global financial markets.

"I'm not sure that's true," Greenspan said in the interview, CBS said. "We were dealing in an environment back there where inflation was easing. We could have acted without the fear of stoking inflationary pressures. You can't do that anymore," he said, according to the excerpts. "I'm not certain I would have done anything different" from Bernanke, he said.