Greenspan Shrugged
Sep 15th, 2007 at 12:48 pm by Susie
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!
The WSJ actually checked some of his facts, as good journalists will do:
Mr. Greenspan writes that in early 1997, he told his colleagues the Fed should raise interest rates as a “preemptive” move against a stock-market bubble. But transcripts of Fed meetings from that period do not support his book’s version of events: They show Mr. Greenspan argued for a rate increase principally because of inflation.
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 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.
Its odd that now that the bankers want an interest rate cut all concern for inflation goes out the window.
Odd especially now that inflation in food and energy really is beginning to be a problem. Of course these are in those “volatile” segments of the economy factored out when they figure the “core inflation”, i.e. inflation that affects rich people.
I suppose they think that a rate cut will not be harmful and cause an increase in “labor costs”.
That’s the pot calling the kettle whore-y.
susie- greenspan is a cynic, free market idealogue, and advocate for the rich. but he is not a cool-aid-drinking, true-believing, theocratic, lobotomized ostrich. he sees where things are trending in the mortgage and financial markets and the economy, realizes very well the war is a catastrophe that may easily be compounded in iran, is aware that the government has been systematically gutted. and he recognizes that a reckoning must come, and with it the inevitable finger-pointing and blame. he is trying to immunize himself to the extent he can. perhaps this is yet more cynicism or perhaps he is old and just cannot accept within himself the idea that he contributed to this mess in any way. as lincoln quoted in his 2nd inaugural, “…for it must needs be that offenses come, but woe to that man by whom the offense cometh.”
[...] Greenspan Shrugged Susie Mafdrak, Suburban Guerrilla September 15th, 2007 [...]
A Greenspan Day…
Susie Madrak seems to remember the past a bit differently from Greenspan as well, and discusses at length his Randian philosophy seems to have led to a number of his more, errr, interesting decisions - like the one to end collecting data on how much …..
There was a very good piece that compliments this one in Saturday’s NYT business section, describing Greenspan’s marriage to a Rand intimate, and a letter he published in the 50’s in which he stated opponents of Rand would and should “perish”.
These are the fanatics that put Reagan in the White House, and carried the ‘government is the problem’ flag all the way to W. They now own and control the MSM, and set the curriculum in business schools and economics programs.
One of the reasons Rand’s program has had such impact, I think, is that in its diluted form it is reasonably functional, and accepted by alot of ambitious, effective people.
Taken straight, however, Rand’s ideas are a program in intellectual bigotry and a celebration of the fascist ‘great man in power’ myth. The great man in Rand’s view is a CEO, not a soldier — but these ideas inevitably lead to war.
The same vision — economic dominance cast in nationalistic terms - led to World War One, setting the stage for all the subsequent catastrophes of the 20th century.
I would have argued that Greenspan can’t plead ignorance on this - but I was shocked hearing him interviewed on NPR how uninformed he sounded — not senile, but simply uninformed and uninterested about any subject outside of free-market economics. (e.g. I’m thinking about his remarks on the association between music and math, which he said are a mystery — they aren’t — and must be genetic - maybe, in the sense that everything is genetic)
When it comes to what he does know, he obfuscates without shame.
He pushed to make Bush’s tax cuts permanent, presumably because he believed this would cripple the American government he loathes. He lies about it because this is his form of cleverness. He lies transparently, because he’s learned from experience that no one who challenges him will be allowed air-time by the corporate MSM.
I think he was a beneficiary of a cult-following himself, based on the panic in the air when he took over in 1987, a little-man’s John Galt.
No his legacy is in ruins with W’s, and he’s pushing his little book.