Roll Over, Ayn Rand

and tell Herbert Spencer the news. The Times reports:

[A] humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.

Floyd Norris: "What was missing was a regulator who understood markets, rather than worshiped them."

Since some of my students seem to actually like Ayn Rand, I will outsource the obligatory Rand-bashing to Dean Baker, who does it well. Actually, I do think Greenspan does deserve some credit for admitting error, at least a little bit. As Keynes said, "when the facts change, I change my mind. What do you do sir?"

Update (10/25): This video at Calculated Risk reveals uncanny parallels between Greenspan and Smooth Jimmy Apollo and Captain Renault.

Update #2 (10/26): Although Greenspan was a member of Rand's circle and contributed several chapters to "Capitalism: The Unknown Ideal," the Rand-ites have apparently excommunicated him (see also the comments to this post). Hat tip: Marginal Revolution.