There's an old joke that, in one of its incarnations, goes like this.

During the Cold War, the Soviets and the Americans decided to arrange a good-will running competition between the two presidents. The day of the competition arrived, and Reagan, being in better shape, outran Gorbachev. The next day, American newspapers proudly reported: "Reagan first, Gorbachev last!" On the other hand, the Soviet newspapers reported: "In yesterday's presidents' running competition, Gorbachev finished an excellent second, while Reagan was second-to-last."

Slovenia used to be part of Yugoslavia - not as bad as the Soviet Union, but still a decidedly socialist state. In its heyday, socialist Yugoslavia featured such boons as a single type of jeans (why would you need more than one type of jeans?); a single type of toothpaste; stores that were predominantly empty; essential goods that were sometimes available, and sometimes were not; for aspiring drivers, waiting lists of several years to buy a Yugo that would start falling apart in about a year.

These times are looked back upon fondly by socialist nostalgists, who emphasize how life was simpler then; how things were less hectic, and everyone lived in harmony, and so forth. Yes indeed, everyone lived in harmony, except the political dissidents who were sent to Goli Otok (Naked Island) - a forced labor camp on a barren rock with no escape, the Yugoslav equivalent of gulag. On the other hand, if you were smart and unscrupulous enough to abuse the system, it was indeed possible to live quite well.

People say that, in those days, everyone could have a house. Yes, indeed: during the times of high inflation, you could get a no-interest loan from a state bank to build a house, and you could repay that loan at a later date when the money became worthless. The hard part wasn't getting money: it was getting the materials to build a house. You needed to pull all sorts of connections to get cement; once you had cement, you didn't have bricks; once you had bricks, you didn't have tiles; etc. But yes, houses could be built on loans that effectively were not repaid, incurring foreign debt and leaving repayment to future generations.

Not to be too wordy, this is to illustrate the dis-economy of socialism, which wasn't even as bad in Yugoslavia as it was elsewhere.

Now, back to the starting joke. Indeed political ideological reporting was ubiquitous in socialist Slovenia. But now, the country has been out of socialism for some 18 years. You would think that, by now, the people working in the media might have changed, and that professional standards might have prevailed, right? No.

Here's an LA Times article titled House panel heaps blame on Alan Greenspan for financial crisis. The article describes the recent congressional hearing of Alan Greenspan, Christopher Cox and John Snow. You can read the article at the link and discover that it is fairly reasonably balanced.

Consider now an article about the same topic, published in dominant Slovenian newspaper Delo (Work). I translate:

Greenspan admitted his mistake

Washington - Former president of the American central bank Federal Reserve (Fed) Alan Greenspan, who led the central bank for a long 18 years and in the process acquired the reputation of an unerring prophet, on Thursday in Congress crushedly admitted that he was mistaken in his unwavering faith in free markets.

Greenspan was questioned by the House Oversight and Government Reform Committee along with Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow. The committee, led by Henry Waxman, a California Democrat, is attempting to determine the causes for the outbreak of the worst financial crisis in the U.S. after the Great Depression in the 1930s. After the hearings of investment bank leaders and ratings agencies, congressmen were facing regulators on Thursday.

Greenspan admitted flaw in his lifelong faith in the free market ideology

Waxman told the three witnesses that, as regulators of the markets, they contributed to the outbreak of crisis due to their beliefs in the unmistakeability of markets without government regulation. Waxman brought Greenspan to admit a flaw in his lifelong faith in the free market ideology. "I don't know how fundamental and long-lasting this realization is, it shook me very much, because for 40 years I believed that the thing works," said Greenspan among else.

A tsunami that comes once in 100 years

The forerunner of Ben Bernanke at the helm of the Fed is under attack from critics that at the beginning of the decade he did not raise interest rates, or rather that he left them low for too long, which contributed to the explosion of the housing market. He also did not use the Fed's ability to regulate the issuing of new types of mortgages, such as subprimes, whose breakdown caused the crisis.

Congressmen faced him with his own statements at the time of the real estate boom, when he denied the probability of a collapse in real estate prices on a national level, and Greenspan apologized that he did not predict this because the United States had not yet faced such a crisis, which he named "a tsunami that comes once in 100 years".

Greenspan admitted that he believed that banks would act in their self-interest and protect their investors and their equity. In his words, there was an error in the economic models used to forecast the future. These models apparently took into account only the past two decades, which were decades of "enthusiasm".

After admitting that even he did not anticipate what happend, he also blamed investors who en masse bought mortgage-backed securities without worrying about a potential fall in condominium and house prices. Greenspan said that he doesn't see how the U.S. can now avoid an increase in layoffs and unemployment, while he also forecasted a fall in consumption. In his words, a necessary condition to end the crisis is stabilization of house and condominium prices, but this will not occur for several more months.

"Will someone go to jail, too?"

Congressmen asked Greenspan, along with the other two, how to ensure that something similar does not happen again. Greenspan said that regulatory reforms will be useful, but he also immediately added that they will mean less than market self-regulation, which ostensibly is already coming. Greenspan is convinced that, in the future, there will be a higher degree of self-restriction.

To questions in the sense of: "Will someone go to jail, too?", the three "wise men" were muted. Cox admitted that someone in this mess probably also broke the law, but he opined that cleansing with the help of the Justice Department is not "ideal", but that it is necessary to learn lessons from it all and prevent a repetition.

Congress Republicans replied to Democratic attacks on their faith in the free markets that the main responsible parties for the crisis were the para-governmental mortgage companies Fannie Mae and Freddie Mac, for which Democrats did not allow more regulation. Waxman asked the three witnesses about this, and they in turn admitted that the two companies were not responsible for the crisis, but contributed to it.
Similar article, different choice of words.

While reporting more or less the same things, the Delo article tries to portray Greenspan, especially to a casual reader, as "crushed", as thoroughly intellectually defeated, as wrong in everything he believed in for the past 40 years.

Yet, this is not the impression that one gets from the LA Times article, and indeed is probably far from the truth. Greenspan did trust the self-regulation of financial institutions more than he should have, and has admitted as much. But this does not change the fact that his trust in markets over regulation is, for the most part, well-founded and valid.

The editors of Delo, however, strive to make hay while the Sun shines. Once again, Gorbachev finished an excellent second, while Reagan was second-to-last.