Greenspan's problem is similar to the problem out West with forest fires. The ecosystem needs regular small disasters to clear out the deadwood that makes for really big disasters. However people don't like disasters, and with active management they can prevent the small ones. So they do. Which leads to a build up, and then when the active management fails (as it inevitably will), you get a far bigger disaster than you would have had otherwise.

But even knowing this it is damned hard to do nothing when you see the small disasters that you could stop.

So Greenspan prevented small disasters for years. And that meant that when a big one shaped up, people with no memory of having been burned could not believe that he had a point with his "irrational exuberance" comments.

Cheers,
Ben