Greenspan Shrugged

So the Washington Post, the New York Times and the Wall St. Journal this morning feature prominent pieces on Greenspan's new memoir.

You will, of course, be surprised to learn that Greenspan is a principled man! Totally above reproach! Loved Bill Clinton, except for the BJ thing! Disgusted with what the Republicans did to his nice economy! Can't believe Bush let the spending get out of control!

I thought we had a golden opportunity to advance the ideals of effective, fiscally conservative government and free markets.

Did I mention that Greenspan is a self-described free-market libertarian? No? Pay attention, because it's relevant in a way that the ladies and gentlemen of the lapdog media ignored during his long tenure.

Greenspan was a longtime associate of Ayn Rand - yes, that Ayn Rand. The one who seemed so very revolutionary when you were 14 or so and first read "Atlas Shrugged."

In an article published in 1963 as part of Ayn Rand's book Capitalism: The Unknown Ideal, Greenspan declared that protection of the consumer against "dishonest and unscrupulous business was the cardinal ingredient of welfare statism."

"Regulation which is based on force and fear undermines the moral base of business dealings," he wrote. "Protection of the consumer by regulation ... is illusory."

Greenspan always believed strongly in deregulation because, well, that's what libertarians believe. For him to pretend he doesn't understand the motivations of the Bush administration's rape-and-pillage pro-corporate mentality is, shall we say, a tad disingenuous. From a Common Dreams article, written in 2000 by Ralph Nader:

This year Greenspan decided to end the collection of nationwide data on bank fees. The survey, which was authorized as part of the financial reforms adopted in 1989, has proven an excellent tool that consumer groups have used to highlight and battle the excessive fees that banks impose on consumers.

Similarly, the Federal Reserve is dropping its "Functional Cost Analysis" study, which has provided important data on how much it costs banks to provide services. This has been a great tool for measuring the validity of bank charges. Credit unions, particularly, have made good use of this data to dramatize fee and interest rate gouging by banks.

But if we believe the words of Greenspan during his Ayn Rand period, he probably doesn't see any need for such data, much less regulation.

And if anyone complains about the loss of such consumer and fair-lending information, Greenspan could send them this excerpt from his writings with Ayn Rand: "Government regulation is not an alternative means of protecting the consumer. It does not build quality into goods, or accuracy into information. Its sole contribution is to substitute force and fear for incentive as the 'protector' of the consumer. The euphemisms of government press releases to the contrary notwithstanding, the basis of regulation is armed force. At the bottom of the endless pile of paper work which characterizes all regulation lies a gun."

And this is the Alan Greenspan who Congress believes should protect the public interest in the regulation of the new financial conglomerates?

So there you have it. According to the Randian wet dream, all regulation is a gun held to the head of Noble Businessmen by jackbooted thugs.

Even if he modified his views somewhat (at least enough to upset other Randians), he still played his part well enough to lead us to the brink of the economic ruin and pending market chaos that is the logical result of blanket deregulation.

One episode in the book as described by the Post is telling:

When he first heard and read details of the Clinton-Lewinsky encounters, Greenspan writes, "I was incredulous. 'There is no way these stories could be correct,' I told my friends. 'No way.' " Later, when it was verified, Greenspan says, "I wondered how the president could take such a risk. It seemed so alien to the Bill Clinton I knew, and made me feel disappointed and sad."

And see, this is the problem with True Believers. They fall in love with an ideal, much the same way a 15-year-old fantasizes about the perfect life she could have with her favorite rock star. They are extraordinarily naive about the complexities of human nature.

I mean, who would ever believe that thievery would run rampart in a deregulated atmosphere? Who knew? Who could imagine that terrorists would fly planes into buildings, or that invading Iraq to steal their oil wouldn't be a cakewalk?

Who could know? Not me! It's not my fault!

For Greenspan to pretend otherwise, to clutch his pearls at the economic fruition of his philosophies, is too hard for any sane person to swallow.

Decent people should shun him. Instead, Beltway politicians and journalists will celebrate him at cocktail parties while the nation falls deeper into the abyss.

Comments

[homovivens]

Brilliant! The only thing you could have added was William F. Buckley's comment on "Charlie Rose" re Ayn Rand's "Atlas Shrugged": that Buckley had to flog himself in order to finish the book.

If I may: Rand was a vulnerable 12-year-old, radicalized by the Russian Revolution of 1917 that invaded her personal space when it confiscated her father’s pharmacy. She never conquered her very personal psychological upset from that scarring, transformative experience in her adolescence – an adolescence in evidence to the end in her persistent, naive overconfidence in narrow views of human nature and the socioeconomic and political context it finds itself in. As Greenspan was taken in by her, one cannot help but wonder where his head is (has been) at. An Eastern adage goes: "To grow old is natural. To grow up is spiritual." The German expression, Zeitgeist, perhaps best describes their mind set -- a milieu of Revolution, World Wars, the Depression and the Holocaust. What’s not to trust about government? is a fair question, but let’s not absolutize it and baptize the hell out of it till it becomes a credo or an Anthem.

[mrcontinental]

Greenspan knew EXACTLY what he was doing and what the effects would be. To try and spin at this late date is beneath him.

He totally enjoyed being the most powerful man in the world and should just accept the fact that he sold out america and that history will not be kind to him in the least.

[cognate]

"So there you have it. According to the Randian wet dream, all regulation is a gun held to the head of Noble Businessmen by jackbooted thugs."

Maybe all businessmen are not noble, but is there any doubt that behind ALL government activity there is the threat of violence?

[Marlie]

I well remember how on more than one occasion he endorsed Bush's tax cut for the rich, at a
point in time when everyone hung onto his every
word. What he says now is too little, too late.

[Wilson33]

For YOU to ACT like you know what the Bush Administration's notions were for going into Iraq is a little...P­RESUMPTUIO­US don't you think? A little ARROGANT, no?

He clarified his statements and that wasn't good enough for you, so now it is time to make stuff up and repeat it over and over and over again.

[Chas434]

Free Market Libertarian: Right... A Free Market Libertarian would not argue that it is necessary to invade Iraq in order to have stable oil prices. Cash would suffice. Mr Greenspan is doing the Washington 2 step.

[hopeless277]

Bottom line: Beware Republicans, ALL Republicans. No matter what they say, what they do, they will try to screw YOU, the consumer. It's just a shame that evidently, a lot of consumers enjoy being screwed.

[faust2001]

The Howard Rourk-wannabes of the world always wind up being Pete Keatings in disguise.

[loril]

It is true that all the libertarians I knew were high school aged boys from upper-middle class backgrounds who were always preaching "personal responsibility" and the guaranteed fruits of hard labor. (Meanwhile, many of these paragons squandered their inheritances on sports cars, if I remember it correctly, graduated with 2.0 grade point averages and took that cush job their uncle was saving for them in the city.)

I used to argue with them in high school and nothing has changed. However, my working definition for a libertarian is a free-market worshiping Repug who still wants to smoke a lot of dope (or recreate with another drug of choice.) So yeah, that kind of fits into the high school profile, too, now that I think about it.

[usna73]

A shill who still loves money and himself more than his nation. No children, no family and a marriage of convenience to another social climber. Who will he leave his money to? I guarantee you that he won't save starving children.

He wanted to be a baseball player when he was a child. It didn't happen because he has no talent. A hack who played the clarinet and saxaphone. Big deal.

What he did best of all was play "himself": A FRAUD!

[julianne]

Alan Greenspan presided over the largest movement of wealth to the top in our recorded history. His idea of supporting our economy was to allow one bubble after another to explode and leave millions of Americans in the road. He says that he wasn't aware that the housing bubble was going to burst, which is a lie. The garbage mortgages that were bundled and sold as assets were sold by the same people that Greenspan works for. He never gave a shit about the middle class. He never called for deep regulation in the derivatives market. He let it all go down. I know people who made a killing speculating that the housing market bubble would burst along with many ordinary citizens who sold their homes at what they rightfully considered to be the top of the market. Perhaps they should run our nation's bank and advise the President. Greenspan doesn't understand or care about the mental and physical health of the American people and how that relates to their meaningful and purposeful labor. Under him, everything was for sale. The economy was hollowed out and sold the to lowest wage-bidders on the international market. He presided over the ruining of the value of the dollar and the worst deficits in our history. He supported the destructive tax cuts for the rich and had a long term economic plan for nothing.

[Herrington]

Greenspan presided over at least three “market corrections”, 1987 stock market, 2000 stock market, and the “housing bubble” of 2006. His job was ostensibly to fight inflation but he did not, he hid it by introducing Reagan to the concept of cooking the books on the CPI.

The man is incompetent a liar and his ideology has cost America its middle class, the engine that drives prosperity.

Don’t anyone dare buy the SOB’s book. Buy a used copy of “The Fountianhead” for a buck instead. it’s the same thing and you will be doing the used book vendor some good.

[Herrington]

My very bad. I was running out the door as I wrote above. Greenspan authored the stepped up social security tax to fund the Baby Boomers in the Social Security Trust Fund, which Bush has now defunded. Milton Friedman was the prick that suggested cooking the CPI. Soooo many bad guys. They all blend into one before sufficient coffee.

[robinhood1]

Since Greenspan left office, I don't recall him even once speaking out on the move by many people in the upper echelons of the Bush administration to push the US to becoming a Christian nation. Libertarians believe in the separation of church and state. Look at their party platform. Greenspan is at best indifferent to this separation. Some Libertarian he is! Does he really want to go back to the days when Protestant bible reading was the norm in public schools? If gays are pushed back into the closet, where does that leave Jews, such as Mr. Greenspan and his successor Mr. Bernanke, or billionaire hedge fund trader Stephen Schwartzman. In a Christian nation, Jews would probably face a lot of discrimination. So would Moslems and Hindus and members of other religions. Separation of church and state has contributed greatly to the country's economic growth over the past two centuries.

It is probably just a coincidence that Mr. Greenspan's book is being published on September 17 which just happens to be Constitution Day. I hope he has at least a few words to say about protecting the Constitution and protecting the rights of all Americans from an overzealous government. Of course, he could just take his $8 million book advance and keep quiet.

[nancytheragingliberal]

I was all for regulation for the benefits to the common person (me). Since Mr.'s oil and gas (men?), came to office, all of my energy bills have skyrocketed. Those sleazy Cheney energy men, behind closed doors, made me pay thousands of dollars more for the luxury of heat, gas, and electricty.

[cheforacle]

The biggest problem with your article is your assumption that Greenspan's views did not change from the time he was smitten by Rand and her books. While I think this country either gave him too much credit or blame for the national economy's performance (I believe the Fed's influence is limited), I would find it hard to believe that his thinking did not evolve over forty years.