A couple of thoughts...
1) Greenspan, when initially criticized by sound economists after gaining the post, basically stated it was much harder to change the system, than the critics believed. Somewhat stating, like bernacke now does, that it's really the role of congress to change the system. So I took from that at the time, he wanted to fix it but he alone couldn't...
2). In lieu of not being capable of solving the problem, he set out with a few basic ideas of A). very clearly telling the markets, in the minutes of the meetings what the next move would be months from the current meeting, so the minutes basically said, bias towards lowering rates, keeping rates the same, or increasing them. He almost always followed that policy, and it was almost always a 25 basis point move. I remember it being odd that people, after many years, would still speculate what the fed was going to do, since he had already said that they were going to do X at the next meeting. B). He also was an inflation hawk to an extent, trying to argue against any excess increase in the money supply.
I think the premise was more Friedman-like that basically, as long as it is crystal clear what the fed plans to do, the market can gradually adjust without a lot of hoopla. Nice, boring, predicitable fed.
I think that after 9/11 he also gave way to panic and may have acting much more out of fear than reason, at the time, his moves to stave off collapse seemed wise, and he basically returned rates way back up after he realized the recession/depression was prevented (IMO delayed). Kind of like, he knows what a clean house should be like, generally kept it clean, made a big mess after 9/11 and then cleaned it all back up before he handed the baton over.
Now this does not excuse him from actually coming out now and advocating for sound money, but for whatever reasons he is not apparently doing that.
I asked someone who knows Greenspan's circle about getting involved with the Revolution, but my understanding is that he was asked to speak in favor of Ron Paul and declined. I believe he may have been asked more than once (as from an economics standpoint it seems RP would be his obvious choice to endorse).
Every person has their own reasons for what they do, I don't know his excuse for not stepping forward. I believe he wanted to but felt he could not do so.
I can easily criticize my own impressions, and feel free to do so as well. I imagine his own guilt of the current situation is probably the best criticism, and I actually feel sorry for the man now. At some point I sent him a thank you letter with a silver 1/2 dollar and he sent a brief reply. I think he still knows the value of metal and the risk of fiat currencies. He won't live to see this chapter end probably and will have to die knowing what he did and didn't do.
Furthermore I am particularly disappointed when he stood behind the nomination of bernacke. As soon as I read about bernacke I was seriously disappointed. Maybe there was no better choice, maybe he thought ben was a good choice, maybe he was pressured by others to publicly stand behind him (though I'm not always rushing to conspiracy theories).
