updated 10/26/2006 9:12:24 PM ET 2006-10-27T01:12:24

Freed from the burden of potentially moving financial markets worldwide with his every utterance, Alan Greenspan cut loose on the economy, the Iraq war, construction of a fence along the U.S.-Mexico border and a host of other topics.

The mostly unvarnished comments came Thursday when the former Federal Reserve chairman fielded a wide range of questions at a meeting of financial representatives in a hotel ballroom here. Clad in his customary crisp dark suit, Greenspan appeared comfortable — leaning back in his chair and crossing his legs.

Asked about the state of the economy, Greenspan declared: “Well, actually it’s not bad. We’ve gone through a very weak patch in the summer,” mostly reflecting the housing slump and less inventory building by companies, he said.

“It is a little too soon to tell” whether the slowing housing market will make a safe landing, he said.

Greenspan, who is writing a book and now runs an economic consulting company, Greenspan Associates, left the central bank after 18-plus years at the helm. Ben Bernanke took over as chairman in February.

When asked about the situation in Iraq, Greenspan replied: “The Iraq war has got a lot of problems.” He didn’t elaborate, but he suggested the war is not having a noticeable effect on the economy. “It is just not evident. You don’t see it in the marketplace in any real way.”

Greenspan briefly got his wars mixed up, though. “What is happening is the huge size of the American economy is absorbing the costs of the Vietnam — I’m sorry,” he said, catching his mistake. “The combination of Iraq and Afghanistan is not large enough ... to have an economic effect.”

Talking about immigration, Greenspan shared that “I’m a little saddened that we are putting up a wall down in Mexico.”

President Bush on Thursday signed a bill authorizing 700 miles of new fencing along the U.S.-Mexico border — a move aimed at deterring illegal immigrants from crossing into the United States.

Greenspan said immigrants come to this country wanting to improve their life and economic standing and are often motivated to make this happen.

On homeland security — including that at airports — Greenspan weighed in saying: “Well, I’m not one who is overly impressed with a lot of the things that we are doing.” He went on to say, “It is not clear to me whether any of that stuff works,” a remark that provoked laughter from the audience. “In fact, I’m reasonably sure it doesn’t,” he added.

Discussing the strain of entitlement programs on the nation’s long-term fiscal health, Greenspan said Medicare is much more of a problem and harder to deal with than Social Security.

“If you get beyond the political rhetoric” and assembled a group to solve Social Security, “it would take them 15 minutes. It would take them 15 minutes only because 10 minutes was used for pleasantries,” he quipped. The audience — people attending the Commercial Finance Association meeting — erupted in laughter.

He also discussed the shrinking importance of manufacturing to the country’s economic might. “Manufacturing is something we were terrific at 50 years ago,” Greenspan said, adding that it “is essentially a 19th and 20th century technology.”

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