Well, it may not matter so much that the Nobel Prize winner isn't on the Council of Economic Advisors (although it is a little strange); what matters is that people acknowledge that he's right. In Vanity Fair:
Greenspan played a double role. The Fed controls the money spigot, and in the early years of this decade, he turned it on full force. But the Fed is also a regulator. If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you’ll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.
Greenspan presided over not one but two financial bubbles. After the high-tech bubble popped, in 2000–2001, he helped inflate the housing bubble. The first responsibility of a central bank should be to maintain the stability of the financial system. If banks lend on the basis of artificially high asset prices, the result can be a meltdown—as we are seeing now, and as Greenspan should have known.
Ah, good old Alan. I remember telling him telling folks to take out ARMs to keep the bubble up. It was bonkers at the time. Bonkers.
Anyway, as Stiglitz says, we're not where we are for one reason. It's been a series of decisions based on crackpottery and a Panglossian ideology that says you don't need rules to prevent chaos and meltdowns. Just remember about self-correcting markets the next year-and-half or so.