Friday, October 24, 2008

Alan Greenspan

Last night, after reading - with growing incredulity - some of the news stories about Greenspan's testimony before Congress yesterday, I wrote a draft of a blog post about it which I ultimately became dissatisfied with. Today I am relieved to see that there is no end of Objectivists blogging about this, and so, rather than posting something of mine which I regard as inadequate, I will simply refer you to Gus Van Horn, whose effort on the subject may be even more strongly worded than what I came up with last night. It is entitled, simply,
Alan Greenspan, Coward and Traitor
Hat tip to NoodleFood, where Diana Hsieh put it quite nicely when she wrote
Gun Van Horn gives Alan Greenspan a much-needed ass-kicking for his repudiation of free markets.
Yes, indeedy, many Objectivists, myself included, are extremely unhappy - to put it mildly - about Mr. Greenspan, who is still publicly associated with Capitalism and Ayn Rand, even though his actions tend to reflect and foster the opposite.

Thus, when Alan Greenspan falters, Capitalism and Rand get the blame. As Hsieh put it:
By continuing to associate himself with the free market ideas of his former mentor, even while thoroughly contradicting them in word and deed as Fed Chairman, and then publicly repudiating them based on a government-created financial crisis, the man has done more damage to Objectivism than Barbara and Nathaniel Branden.
Here's the Ayn Rand Center press release:
Greenspan Has No Free Market Philosophy
October 24, 2008

Washington, D.C. --Opponents of the free market are giddy at Alan Greenspan's declaration that the financial crisis has exposed a "flaw" in his "free market ideology." Greenspan says he is "in a state of shocked disbelief" because he "looked to the self-interest of lending institutions to protect shareholder's equity"--and it didn't.

But according to Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, "any belief Greenspan ever had in truly free markets was abandoned long ago. While Greenspan long ago wrote in favor of a truly free market in banking, including the gold standard that such markets always adopt, he then proceeded to work for two decades as leader and chief advocate of the Federal Reserve, which continually inflates the money supply and manipulates interest rates. Advocates of free banking understand that when the government inflates the currency, it artificially increases prices and causes booms in certain sectors of the economy, followed by inevitable busts. But not only did Greenspan lead the inflation behind the .com bubble and the real estate boom, he blamed the market for their treacherous collapses. Greenspan should have recognized that what he wrote in 1966 of the boom preceding the 1929 crash applied here: 'The excess credit which the Fed pumped into the economy spilled over into the stock market--triggering a fantastic speculative boom.' Instead, he superficially blamed 'infectious greed.'

"Should it be any shock that Greenspan now blames the free market for today's meltdown--rather than the Fed's policies, which fueled an inflationary housing boom, which rewarded reckless lenders and borrowers from Wall Street to Main Street? Greenspan didn't mention the word 'inflation' once in his testimony.

"Whatever Greenspan's economic philosophy is, it is not anything resembling a free market."

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