Wayne Angell, a Kansas native who served on the Federal Reserve Board from 1986 to 1994, said Greenspan played a role in creating the housing bubble through monetary policy.

"One of the first conversations I had with Alan Greenspan was the Hippocratic Oath and the mantra to do no harm," said Angell, who is also a former chief economist at Bear Stearns. "But harm he did."

He said the Fed's move to bring the Federal Funds Rate to 1 percent in 2003 and keep it there until mid-2004 precipitated the housing bubble because there was no house price deflation.

Angell, who was born in Liberal and served three terms as a state legislator in the 1960s, was the keynote speaker at the Kansas Society of CPAs annual tax conference at the Wichita Airport Hilton.

About 200 people attended the conference, organizers said.

Angell also criticized Paulson for not using part of the $700 billion rescue plan for Fannie Mae and Freddie Mac.

He argued that boosting the capital of those two institutions would be more helpful in solving the financial industry crisis than "picking and choosing" which commercial banks in the U.S. should receive capital infusions from the federal government.

But he praised Federal Deposit Insurance Corp. Chairman Sheila Bair, who "has the right plan and right approach" for avoiding more home foreclosures.

He also said Fed Chairman Ben Bernanke is the right person to be leading the central bank because of his studies of the causes of the Great Depression.

"We have to be very grateful for Chairman Bernanke's background," Angell said.

It's because of Bernanke's understanding of the Great Depression that Angell thinks such a scenario will not be repeated this time.

"I'm optimistic about our future," Angell said.

The Depression-era Fed is far different from the one today, he said. Instead of having an "ad hoc committee" making monetary policy like it did in the 1920s and 1930s, the Fed today is more disciplined.

And, he said, there is no one Federal Reserve Bank out of the 12 member banks that controls the policymaking. Such was the case in the late 1920s, he said, in which the New York Fed had the decision-making control of the ad hoc committee.

"It was run on the basis of what was right for the stock market," Angell said.