Friday, October 24, 2008

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.

22 comments:

john said...

Yes, he must change. Perhaps he could become an Objectivist!

My point is that any resemblance between Greenspan and Ayn Rand's ACTUAL system is total illusion.

Greenspan DID make a monstrous error yesterday: he blamed "flawed market forces." How craven. He should have said: "I am totally shocked and ashamed I allowed myself to believe that market forces could continue to clean its own stables while half-regulated, politicized/subsidized, throughly federalized and social-mandate-driven. Instead, the men of integrity and production were driven out and scoundrels flourished. I guess Miss Rand was right after all. And I am an idiot."

John Donohue
Pasadena, CA

Richard said...

Further to Mr. Donohue's comment...

You, and readers who agree with you, are egregiously uninformed about Rand, and the entire financial crisis…

from The American Competitive Enterprise Institute:
“While the Dow collapses, we have a bull market in government regulations. The 50-plus departments, agencies and commissions are now at work on 3,882 rules; 757 will affect small businesses. More than 51,000 final rules were issued from 1995 to 2007.”

That’s 51,000 NEW regulations, added to what was there before.

On another of their web pages:
“Well over 48,000 final rules were issued from 1995 to 2006–that is, during Republican control of Congress.”

That isn’t capitalism, that’s fascism/corporatism & some socialism. At root, the very destructive things Rand’s lifetime was spent in presenting to Americans. Read “Capitalism: The Unknown Ideal” to see how “The Virtue of Selfishness” really works, and why Capitalism is the only moral system. (Greenspan dropped any pretense of understanding her arguments sometime before he became head of the Fed., and became a major part of the problem.)

Americans will get no relief from this massive problem from either McCain or Obama, nor until they return to the Founding Father's principles, as refined by Rand.

Bill C said...

Thanks for the comments. Obviously I have a different opinion of Ayn Rand, and I'm not going to argue on the correct interpretation of her views. But I appreciate having a different point of view available to anyone who reads my posting.

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Perhaps, it would be in your best interest to investigate Miss. Rand's views more thoroughly. Carefully consider the many articles in such collections as "The Objectivist", "The Ayn Rand Newsletter" and "The Objectivist Forum". Keep track of points you disagree with, and where you encountered them. Then when you fully understand her "Introduction to Objectivist Epistemology", you can then rethink the readings that troubled you. It is fascinating, and in many ways fun, to see your own confident mind go, "Oh, YEAH! That IS right, I just never thought to acknowledge that part of it as being so important! Or, some variation thereof.

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