Alan Shrugged
Washington Dispatch: In a historic moment, former Fed chair Alan Greenspan acknowledged he had been wrong for years to assume that government regulation was bad for markets. Whoops—there goes decades of Ayn Rand down the drain.
October 24, 2008
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In a congressional hearing room on Thursday, former Fed Chairman Alan Greenspan, one of the most influential civil servants of the past century, saw his stock plummet—and his entire career lose its moorings. More important, the ideological battle over economic theory and the role of government in markets—a fight that has played out in the current presidential campaign—took a historic turn.
With members of the House oversight and government reform committee blasting Greenspan for his past decisions that helped pave the way for the current financial crisis, he acknowledged that his libertarian view of markets and the financial world had not worked out so well. "You know," he told the legislators, "that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well." While Greenspan did defend his various decisions, he admitted that his faith in the ability of free and loosely-regulated markets to produce the best outcomes had been shaken: "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms."
In other words, whoops—there goes decades of Ayn Rand down the drain.
Democrats on the committee made Greenspan eat ideological crow. And after the hearing, Democratic Senator Dianne Feinstein of California released letters Greenspan had written to legislators in 2002 and 2003 that now cast the former chief banker as out of touch with financial reality.
Back then, Feinstein was pushing for regulating financial instruments known as derivatives—particularly those called swaps. In 2000, Republican Senator Phil Gramm, then the chairman of the Senate banking committee, had used a sly legislative maneuver to pass a bill keeping swaps free from federal regulation. (Lobbyists for financial firms had helped to write the bill.) The swaps market subsequently exploded, as financial firms bought and sold swaps as insurance to cover their trading in subprime securities and other freewheeling financial products. In a nutshell: the rise of unregulated swaps enabled the growth of the shaky subprime securities at the heart of the current financial crisis. Greenspan was an ardent supporter of keeping swaps virtually unregulated.
In 2001, Enron, having gone crazy with energy derivatives, collapsed—after the firm had manipulated the California electricity market, costing residents of Feinstein's states billions of dollars. Following that fiasco, Feinstein decided the derivatives market needed to be reined in. As The Wall Street Journal reported in 2004, "When she telephoned Mr. Greenspan for support, he declined, telling her the proposal threatened the multitrillion dollar derivatives industry, which he considers an important stabilizing force that diffuses financial risk."
In September 2002, Greenspan, Treasury Secretary Paul O'Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome wrote a letter to members of Congress to note their opposition to legislation that would regulate derivatives. They wrote:
We believe that the [over-the-counter] derivatives markets in question have been a major contributor to our economy's ability to respond to the stresses and challenges of the last two years. This proposal would limit this contribution, thereby increasing the vulnerability of our economy to potential future stresses....
We do not believe a public policy case exists to justify this governmental intervention. The OTC markets trade a wide variety of instruments. Many of these are idiosyncratic in nature....
While the derivatives markets may seem far removed from the interests and concerns of consumers, the efficiency gains that these markets have fostered are enormously important to consumers and to our economy.
Greenspan and the others urged Congress "to be aware of the potential unintended consequences" of legislation to regulate derivatives.
They got it exactly wrong. Swaps and derivatives ended up undermining, not bolstering, the economy.
Feinstein was not convinced by Greenspan's argument, and she continued to press for legislation to regulate swaps. And Greenspan continued to resist. In a June 11, 2003 letter—also signed by the new Treasury secretary. John Snow, the new SEC chairman, William Donaldson, and CFTC chairman Newsome—Greenspan praised derivatives and called them an essential part of the economy:
Businesss, financial institutions, and investors throughout the economy rely upon derivatives to protect themselves from market volatility triggered by unexpected economic events. This ability to manage risks makes the economy more resilient and its importance cannot be underestimated. In our judgment, the ability of private counterparty surveillance to effectively regulate these markets can be undermined by inappropriate extensions of government regulations.
They were asserting that government regulation undercuts market-driven self-regulation. But as events have demonstrated, unregulated swaps did not protect Big Finance firms; they weakened the entire financial industry in the United States and overseas.
In a November 5, 2003 letter, signed only by Greenspan, the Fed chair again took a shot at Feinstein's proposal to control derivatives. He noted that "enhanced market discipline" would address concerns about the manipulation of markets.
Before the oversight committee, Greenspan said that he had been "partially" wrong to believe that swaps did not need regulation. But he did seek cover by claiming he had not been alone in screwing up: "The Federal Reserve had as good an economic organization as exists. If all those extraordinarily capable people were unable to foresee the development of this critical problem...we have to ask ourselves: Why is that? And the answer is that we're not smart enough as people. We just cannot see events that far in advance."
But not everyone got it wrong. In the late 1990s, regulators at the CFTC wanted to regulate swaps. Gramm, Greenspan and others—including senior members of the Clinton administration—did not. Following the Enron debacle, Feinstein took a run at this. But Greenspan and Bush administration officials said no. And it was not an issue of smarts; it was a matter of ideology.
In fact, it was always a matter of ideology for Greenspan, a libertarian champion. In 1963, writing in Rand's "Objectivist" newsletter, he noted, "It is in the self-interest of every businessman to have a reputation for honest dealings and a quality product." Regulation, he maintained, undermines this "superlatively moral system." Self-governance by choice, he said, would be more effective than governance through government. Regulation, Greenspan maintained, was the enemy of freedom: "At the bottom of the endless pile of paper work which characterizes all regulation lies a gun."
Well, it turns out that at the bottom of the system that Greenspan oversaw for years, there was nothing but a pile of bad paper. And testifying to the House oversight committee, Greenspan, one of the more ideological Washington players of the past few decades, essentially said that Ayn Randism had let him—and the entire world—down. It was truly a God that failed.
David Corn is Mother Jones' Washington bureau chief.
None of those, by themselves, has proved to be resilient enough to sustain a society over the long term. Successful societies have been a smart mix of the three. It is when they get out of balance, as in the case of Greenspan's libertarian ideology outweighing his understanding of capitalism, that they go wrong.
Love the title!
It’s not so much that he allowed the banks to get away with proverbial murder as it is that he works for them. The Federal Office of Comptroller of Currency was being run like the Sopranos and still is. This is a very large part of how we got into the present mess. Large national banks were acquiring small regional ones and removing their charter (license) from the given state capitol to Huston, Texas. Wikipedia says that the OCC “was later [after its founding in the mid 1800s] transformed into a regulatory agency to instill confidence in the National Banking system and protect consumers from misleading business practices.” Maybe that was once true but it has since become a refuge for extortionists. At one point (then NY Atty. General) Elliot Spitzer unsuccessfully tried to compel national banks into following state mandated guidelines. He was defeated—I think in Federal court. Essentially, if the federal government issues a license to commit (what is as a practical matter) a felony, any state’s law can not prevent those crimes from reoccurring.
This fundamental transition from regulation to anti-regulation required one additional fix-up to become fully functional. Before Bush-W and the conservative Republican super-majority took over the Congress, the OCC was under the jurisdiction of the Committee on Energy and Commerce, which was run by a group of no-nonsense consumer advocates, such as John Dingel. Through a series of finagles, the banking jurisdiction was moved to the House Committee on Financial Services, which had been pre-stacked with flunkies (including Barney Frank) who knew that their bread had been buttered on both sides.
Lastly, the Federal Reserve maintains its own set of specialized Banking laws, which do not require approval from the President or Congress. These are not criminal laws and only mandate civil penalties for banks who do not comply. However, the Federal Courts (under a series of Bush Atty. Generals) were required to enforce these regulations and that wasn’t happening at all. Banking law is very specialized and only a few law firms have such experience. This sounds crazy but is literally true. Almost every single prominent banking attorney in the USA was on permanent retainer to the large banks and could not (by professional ethics) represent civilian litigants against them. Of course, a smart general practitioner could hit the books and in theory, file a well composed brief on Federal Banking regulation. Such studiousness was not generally rewarded and such determination was generally met with laughter. The existing rules were almost universally not being enforced.
Here Greenspan was, this nerdy guy, hobnobing with celebrities. All he had to do was mind his manners and let the others in the scam have what they wanted, filthy wealth.
Any self-respecting capitalist would advocate abolishing the Fed, not running it.
Greenspan contributed to the credit crisis by keeping the interest rate artificially low, but this has been longstanding government policy for years, in the name of the thoroughly altruistic goal of luring borrowers who really shouldn't be getting mortgages in the first place. Fannie Mae, Freddie Mac, the CRA, low central bank rates. It's all government-fueled, and it distorts markets and keeps banks from saying what they should have been saying: "Denied!"
The issue of regulating innovative financial products and Greenspan's so-called capitalist recklessness are red herrings. The cause of the credit bubble, and our current recession, is the loose credit policies encouraged by our government.
if one looks at, let's say, economy as existing in isolation from everything else that goes on, one is bound to mislead self.
one cannot, i suggest, obtain knowledge ab economy if one does not relate it to workers, bankers, military, cia, police, oneparty system as in US, warfare, (ab)use of nature, pollution, warming, greed, deception, half truths, lies, religion, technology, knowledge, (mis)education, disinformation,etc.
looking at each of these salient events connectedly, obtains a different conclusion or even knowledge.
and the knowledge is our greatest wealth.
how to obtain it w. so much disinformation, misteaching; w. media in private hands?
well, one can't.
education and knowledge is of the paramount importance. but it is liars and deceivers that control it.
and for obvious reasons.
one of the ruses used by the deceivers isto make simplicity out of complexity and complexity out of simplicity.
such as education being complex while in fact it is childlike simple to tell the truth and stop lying. thnx
Greenspan resembles not Howard Roark but Peter Keating, the consummate social climber.
Like others in Ayn Rand's circle, I condemned Greenspan as a compromiser as far back as 1969. Ayn Rand was more generous, considering him a friend. But she died in 1982, long before the real Greenspan, the philosophically lobotomized Greenspan, came out of the closet.
The failure of Greenspan--"the maestro"--to be able to regulate the economy successfully shows that government can't run the economy, the regulatory state will never work.
It's time for all the would-be Greenspans to get out of the way and let freedom reign.
By the way, laissez-faire, which ended with the Sherman Antitrust Act of 1890, worked fantastically. It transformed America from a scattered set of primitive colonial settlements to the leader of the world. It is statism that has *never* worked and never can.
I doubt if the hero of an Ayn Rand novel would have found his humanness so overpowering.
Anal Greenspan is senile, and as such may, prehaps, be excused for any lingering thoughts that he actually pursued the policies he expounded in his youth, when in fact he had been working in the exact opposite direction those principles would dictate.
David Corn, on the other hand, can lay claim to no such senility excuse. Which leaves us with two possible conclusions:
1. He's never actually studied the Libertarian economics he has spent a career railing against.
or:
2. He is well aware that Greenspan has actually been following Central Banking policies exactly as a Socialist economy would dictate, rather than Libertarian economics and is being intentionally deceitful about it for obvious reasons. And this makes sense as he's probably certain that 99+% of his "progressive" readership has NOT read the Libertarian economists, and they'll parrot whatever he tells them is so.
Damned poor excuse for "Smart, Fearless Journalism" any way you slice it.
Greenspan, on the other hand, may well have another motive for what he's claiming this week. Having spent years being made filthy rich by the Federal Government, how likely is it that he'll stand before that same government and tell them THEIR ideas about how to handle an economy are the root of the problem? No doubt he's still lucid enough to calculate the effect of such statements on his generous pension, and the annual 'stipend' ne no doubt receives for 'staying on' in an 'advisory position'.
Decades of brainwashing and a dumbed downed society will hasten America into a type of third world society.
Between privatized health care and the industrial military complex and wars for profits and deregulation America is toast.
bye bye America imperialism.
Could not have happened to a more deserving country.
Americans killed one million Vietnamese in that other illegal war and did not bat an eye.
Americans will kill one million Iraqis and not bat an eye. Oh they are upset over the money being spent on that war but the death of Iraqis: not one bit of shame.
As Americans stated in nam better to kill them over there than over here. Been hearing the same tune with this illegal war. The journalists don’t have the guts to say such things as American imperialism.
Evil is as evil does. Americans don’t have a clue they have become an evil country hated by the rest of the world.
Actually, many of us Americans who have spent sufficient time living abroad throughout the last decade or two fully understand the hit our reputation has taken--most notably and substantially in the last few years. The reasons for this loss of admiration and respect are surely justified and are, in my experience, twofold. First, the obvious one: the Bush doctrine (enough said; we're basically alone on that one--among The Common People of the World); secondly, and almost as universally overlooked by the media as preemptive war is focused upon, is the rising awareness of America's stealthy sacking of the world's wealth.
The internet has finally allowed the rest of the world (on a large enough scale within general populations) to understand what has been happening over the past 100 or more years. Finally, the message that Howard Zinn, Noam Chomsky, Chalmers Johnson et al have been attempting to communicate for so long has been heard--and now, painfully witnessed in the market turmoil--to such a degree that it will have the inevitable effect of rendering America a very different place...soon. If there were ever any doubt about how the American-Business Complex (ABC) views the rest of humanity(in effect, if not always fully in intention), the most recent sacking of world wealth, building millions of homes in America and getting other countries to pay for it--through the billions in losses they are absorbing on our paper--speaks very clearly to removing such doubts.
There are legislative bodies and corporate boards huddling in dimly lit rooms along long wooden tables all around the globe, crafting and considering legislation and policy that will include articles and sub-articles, sections and subsections, exemptions, interpolations, and extrapolations that will all have, in essence, one intention, one result: "America? Never Again!" Not in this century.
The anger toward and hatred of Americans is not just to be found in caves in Afghanistan: there are Canadians, Australians, South Koreans and Japanese, not to mention the British…et al, that are just as willing to despise Bush and Wall Street and, by unfortunate extension, Joe Six-Pack, for what “America” hath wrought...
Thanks for not being in denial anymore Mr. Greenspan, welcome back to the light. Now what are you going to do to help get our economy out of this mess?
And who GIVES a Corn-filled crap what he wrote in 1963??
What matters is what he DID in the 1980's & 90's, and it SURE wasn't Anything 'Libertarian'.
If I were a conspiracy theorist, I'd have to say that Congress cooked this whole "confessional" thing up for Greenspan to spew so as to discredit the ONE man in Congress who had it right. The ONE man who'd been trying to warn Congress and the American people that this mess was coming for years and years. And you Know that was Ron Paul.
It's a cinch Congress & the Prezidick, both present and future, don't want to do something that would make the economy sound if it would mean giving up their power to control, for their own benefit, the money of the American people, and that's exactly what following Libertarian economics would force them to do.
And, this is not a phenomenon confined to the United States, either. There's much talk about 'global markets' and trade agreements and this and that, but at the end of the day, it's all kind of a Gentleman's Club that all are 'invited' to participate in.
So, what happens when the bottom falls out of it, what happens when people start calling 'B.S.' on the whole thing, and you find people like Dick Grasso skimming 600 million a year off the operation of the NYSE, or these other multi-millionaire CEO's that couldn't keep their hands out of the cash register, and happily walked out the door with their money while the institution imploded behind them?
When one or more institutions decide that their operating standards no longer require oversight, and start operating in breach of some basic general principles, like having external audits periodically performed by disinterested third parties, and do other things, like the whole mortgage lending to illegal aliens business, business indeed, there, or the mortgage-backed securities that aren't worth the paper they're printed on, that kind of stuff, at what point does the whole 'market' just break down into the tawdry work of money-smut that it really is? When does the first ray of light shine in, causing the 'roaches' to scatter for the dark and dingy corners both foreign and domestic, in hopes of eluding an angry public bearing a figurative can of Bug-B-Gone in the interest of restoring basic livability to the United States?
When futures speculators can run up our prices, when foreign-based slumlords can basically move millions of americans out of their homes and into their cars, which have no gas in them, at that point, I think we have given over control of our economy, and hence our country, to people that have no responsibility to the public, to the voters, to the actual CITIZENS of the United States, and in such political/economic environs, I believe that it is right and proper to have the above-mentioned dark little corners brought fully to light, and given the thorough and long-overdue Comet-and-hot-water treatment necessary to rid ourselves of the fiscal fungus and other living things that've taken hold in the United States, that force us another 1/2 trillion or so into unrepayable debt each year, that have our very own politicians and representatives making specious promises to the voters as well as to foreign-based parties and interests, such as they might be, and in the process screwing the general public right into the ground. If that's the kind of stuff we can expect from Wall St. et. al. in the future, then I say, 'close it, and open up a hardware store instead, selling tools and things made in the USA, to U.S. citizens, and take a couple of those international airports, and convert them into farms or racetracks or something like that'.
Not to put too fine a point on it, but globalization has done more harm than good in a lot of ways, and in addition I'd like to see a lot of these speculator people vetted out for government-related conflicts of interest, union ties, foreign influences, basically a whole-nine-yards housecleaning, there, before trying to invite any US citizen to again invest in their so-called 'securities'. A racket is a racket is a racket, they can lie about it for about so long, or they can sober up(let's see more drug testing at all levels of our government too, including testing for prescription drug abuse, there), face reality, re-define their understanding of certain key terms like 'graft', 'fraud', 'usury', so forth and so on, and maybe even take the opportunity to look at the government's finances while they're at it. This 'war' thing they've got going on has helped to put basic livability in the ditch, too, so start looking for a lot of different little causal factors, including unions, hyperinflated government contracts and wages, basically anything that even remotely smells like public corruption of any kind, and take issue with it, and that can be their new regulatory standard. Kudos again to Rep. Waxman for tirelessly going after the war profiteers. Honesty should be our national standard. If entities that've long made their bones on Wall St. can't withstand that kind of thing, then may they collapse and be abolished and thereby remove themselves as a national liability to the citizens of the United States. Time to get smart about what we're doing here, and not just take it on faith that anyone, Greenspan included, really knows what the blank they're talking about, or that they're telling the gospel truth. What kind of stories would YOU tell if someone slid you a suitcase full of money? Greenspan got a million in small unmarked bills bricked away in the basement of HIS house that he can't quite explain? Bet he doesn't miss any meals...
Oh, I don't know -- let me see -- could it be...
MAMMON?
(Apologies to Church Lady.)
Well said!
No libertarian on earth would be the Chairman of the Federal Reserve Bank. For starters, the most basic principal of libertarian market theory is economic non-intervention. The Federal Reserve is by its very nature an interventionist institution and therefore an affront to libertarian market theory. Likewise, setting interest rates artificially low; i.e., price fixing, is economic interventionism at its worst and therefore an affront to libertarian market theory.
I don't give a damn what Greenspan wrote in 1963, because from 1987 to 2006 he did the opposite. These are pretty basic concepts, yet you have failed or refused to discuss them honestly and instead you have cherry picked the facts, poorly I might add, to suit the ideological status quo of this publication.
All the most prosperous first-world nations have mixed economies.
Instead, we find the claim that what wasn't followed has been proven not to work, instead of the claim that what has happened has shown that what *was* implemented, doesn't work.
Objectivist and Austrian economic theory is clearly at odds with Greenspans actions, and claiming this isn't the case simply isn't supportable.
The unquestioning agreement demanded of her adherents includes agreement with her staunch anti-environmental stances, as well as her anti-worker, anti-union, and anti-disabled viewpointws. A pure libertarian would immediately discontinue all public education in America, resulting in mass crime and poverty.
Think for yourself.
Wealth today is distributed primarily based on what race, class, and gender a person is born into. Not how hard they work or how intelligent they are. You can't be a successful capitalist without starting with capital to begin with. Nothing from nothing yields nothing.
And isn't it clever how Congress managed to get it's primary economic TOOL, Alan Greenspan, to blame the Austrian School of Economics, and by association Ron Paul, for the collapse of THEIR economy?
(guess he must have put quite a scare into them, turning out to have been right and all..)
And just like David Corn's readership to be so easily duped by such demonstrably false claims!
The one group of people who turn out to have understood what would be the outcome of the policies our government has pursued are going to be blamed by a government that consistently turned a deaf ear to their warnings.
Machiavelli would feel right at home working in THIS Congress!
First of all, you're quite wrong to say that one's wealth has nothing to do with what class they were born into. The single most statistically significant indicator of a person's future wealth is the wealth of their parents. The second most statistically significant indicator is the wealth of their grandparents.
As for the comparison of the strict advocacy of laissez-faire capitalism to a religion: You have said yourself that laissez-faire capitalism has never been tried. It then follows that there is no evidence that it would be the best or even necessarily a good economic system. If it's not based on evidence, then to some degree it must be based on faith, and that is why the comparison is (to some degree) appropriate.
It's amazing to me how the press is playing patty-cake with Congress by not asking them why they didn't pay 2 seconds worth of attention to Ron Paul, Harry Browne and so many others who've tried to raise a red flag, predicting our present state of affairs for years. And how the public just eats what they're fed. But it's the public's habit of eating what they're fed by the Government-Media Complex that's allowed the government to manipulate THEIR (public's) Wealth for the benefit of the manipulators all this time anyway.
For over seventy years America has had a regulated economy. In that time there has never been a re-ocurrence of what in large part provided the impetus for that regulated economy, the Great Depression. Now you are saying that the recent collapse was a result not of relatively recently implemented de-regulation, but because the de-regulation did not go far enough. Of course, you have no way of proving that because each time the economy begins moving toward your ideal, it experiences a catastrophe and the move in the direction you seem to think so beneficial is hauled back to the trash can where it belongs.
That you use this half-baked, very neurotic novelist as your in-house philosopher does not encourage me either. Your philosophy=selling snake oil to whatever suckers you can find as long as you can get away with it=enough suckers will wise up and quit buying the snake oil=come up with a new and different snake oil and start the whole cycle all over again-if everyone hasn't already died from poison. It seems a lot easier as a society to decide not to allow any snake oil to be sold in the first place, but then I am just a hardworking non-millionaire with no chance to ever be a millionaire who probably just can't grasp Rand's simple-minded heroes nor believe in their purity.
As for the 80%, how do you know they do not come from wealthy families? Certainly some of them would have to.
As for other forms of economic governance not working, all of the most successful first world have mixed economies. These economies work better than anything else that has been tried so far. Laissez-Faire capitalism vs. Socialism is a false dichotomy.
Then forget Rand!
I could never manage to stay awake through a single one of her works. She couldn't hold my interest either as a Sci Fi author or Libertarian philospher.
Try Hayek, Von Mises or Murray Rothbard. Raise your sights a bit.
It's disheartening to see how many people have lost their heads and are now calling for regulation and socialism, when standard banking practices, unforced by a liberal congress to make bad loans, is all that is needed. Also the Fed conspiracy weirdos are in high dudgeon these days.
created by pioneers in invention and engineering. In fact I see the plot playing out nicely in the derivatives
collapsing. Unfortunately a promise that my review would get published never materialized.
I should add, however that
Some of Ayn Rand's followers are actually crazy, advocating such things and nuking the countries under Islam.
Look in the mirror and figure out that this was EXACTLY what Ron Paul and others in the Austrian School predicted, and that it is because of excessive credit and fiat currency economic boondoggles. In other words, blame statist policy and play money.
["To take from one because it is thought that his own industry and that of his father's has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association--'the guarantee to every one of a free exercise of his industry and the fruits acquired by it.'"]
--Thomas Jefferson-- 1816
The Federal Reserve itself would never exist in a Libertarian world. The Fed failed in its purpose during the Depression and a multitude of financial hardship for many decades. It should be abolished in a Libertarian and a capitalistic world.
Libertarian ideals haven't been in place since the beginning decades of the U.S. Since that time we have seen greater and greater government intervention with regular "hiccups" along the way.
We do not live in a free market system and haven't for many, many decades.
So quit criticizing the failure of Libertarian principles when they had NOTHING to do with this latest financial crisis.
Here here! Be true to the original founders. Eliminate all those silly amendments. All those for the enslavement of Whoopi Goldberg and her fellow African-Americans say AYE!
examine your premises.
Please read the study to which this article is referring: http://www.washingtonpost.com/wp-dy n/content/article/2007/11/13/AR2007111301834.html
According to the Pew studies, America has less upward economic mobility than Denmark, Canada or Finland. "In America, more than other countries," says project director John Morton, "the circumstances of your birth have more to say about where you end up than how we tend to think of ourselves."
Got anything that actually leads to the study you're quoting?
My bad. Sorry. All you had to do is remove the space between the 'y' and 'n' - but here is the article I quoted, again:
http://www.washingtonpost.com/wp-dy n/content/article/2007/11/13/AR2007111301834.html
The actual study is here:
http://www.brookings.edu/papers/2007/11_menwomen_isaacs.aspx
More abuse of the taxpayer is coming.
Congress didn't do its job, ... again.
http://pacificgatepost.blogspot.com /2008/10/what-they-didnt-tell-us-about-bailout.html
That would be a valid extension had Greenspan actually adhered to such a principle. However, under both Bushs as well as Clinton, he engaged in exactly the sort of Top-Down attempts to manipulate the economy that the government (and many Liberals) are telling us today are what the economy needs as a 'fix'.
More of the poison will somehow act as the cure, in other words.
["If you oppose fiat currency and centralized government banking, and would like to abolish the Federal Reserve and legal tender laws in favor of free market banking and free market money . . .
And you think the best way to achieve these things is to put the right people -- people who believe as you do -- in positions of power, then . . .
It would have been reasonable to assume, prior to seeing him in action, that Alan Greenspan was the "right person" to head the Federal Reserve.
You could have justifiably assumed, based on Greenspan's previous writings and statements, that he would use his position to not only control the damage done by the Fed, but also to argue for its abolition.
None of these things happened. Instead, the opposite happened. Greenspan betrayed every economic principle he had previously professed."]
Some of you folks on the left (right, up, down, or wherever..), who believe federal government should act more responsibly, might actually agree with Downsize D.C.'s campaign to force members of Congress to actually read the bills they vote on (at present, they don't have to, and so they Don't!)
You can learn about it and support it here: http://www.downsizedc.org/etp/campaigns/27
Or, you might be interested in supporting their campaign to stop Congress from lumping unrelated provisions into 'Must Pass' bills, knowing that the things they're stuffing in wouldn't pass on their own merits.
You can learn about that here:
http://www.downsizedc.org/etp/campaigns/83
unless your friends are intelligent and observative enough to know that Greenspan never actually followed Libertarian/Fiscally Conservative ideologies as Fed Chairman, and that policies and principles that were never actually practiced can't be to blame for anything, no matter what Congress enticed Greenspan to say about it.
Ron Paul - 2004
http://www.house.gov/paul/press/press2004/pr021204.htm
["Greenspan Ignores Dangerous Trends
Rising Debt to GDP Ratio is a Warning"]
Ron Paul - 2004
http://www.house.gov/paul/press/press2004/pr021804.htm
["MANIPULATING INTEREST RATES"]
Ron Paul - 2000
http://www.house.gov/paul/congrec/congrec2000/cr051500.htm
["Will Rising Interest Rates Burst the Housing Bubble?"]
Ron Paul - 2004
http://www.house.gov/paul/press/press2004/pr050504.htm
["Paul Questions Bernanke on M3, Inflation"]
Ron Paul - 2006
http://www.house.gov/paul/press/press2006/pr021506.htm
I'm sure they'll find the numerous comments clearly debunking Greenspan & Corn's contentions both entertaining and enlightening.
fbeen: Nice job of expounding the anti-Libertarian's skewed view of what Libertarians believe.
It's as accurate and welcome as an explanation of Buddhism from a Baptist.
For anyone who wants a basic Libertarian's view of Libertarianism, let me suggest Dr. Mary Ruwart's book: 'Healing Our World: The Other Piece of the Puzzle', and the greedy "It's All About ME and MONEY" b!tch has made it available to you Scot Free, right here: http://ruwart.com/Healing/
... but he used Libertarian/Rand arguments to make his case for deregulating the CDS market. This is clear. His experiment failed because he was working with a faulty model..."]
I guess this explains why 'Strictly Regulated Markets' believer Bill Clinton removed him..?
Or was it..., why Libertarian Bill Clinton kept him on for 8 years..?
I can never seem to remember which that was supposed to be.
Those may be good points regarding differences in population and population density, I don’t know – it’s not something I can answer. It’s not immediately clear to me that those variables really play a role in upward mobility. It sounds like you may have a problem with the methodology of the study. Perhaps you know something that the Pew and Brookings economists do not – you should bring your criticisms to them. But you could also Google other studies that suggest the same thing, if you are curious.
US tax laws are so full of loopholes that they are effectively some of the lowest in the world.
As with all billionaires, Bloomberg, Gates and Walton earned their wealth and grew their businesses with massive government investments. To point to these men as models of libertarianism and free market success is utterly absurd. They benefited from big government, contradicting your claim that big government brings the problems.
CalTater,
You should probably re-read both of them.
There are truths out there and there are ungodly people who are pulling the strings , just look under the rocks.
You demonstrate perfectly the lunacy of Libertarian, free market ideology. If anyone had any doubt about the insanity of deregulation ideology before reading your bloviation, they certainly do not now. Thank you.
No one is saying we live in a free market. We clearly do not live in a free market. However, Alan Greenspan used one of the tenets of free market, Libertarian, Ayn Rand idealism by arguing for less regulation over the CDS markets - the cause of the financial crisis.
Speak to this point, specifically. The rest is just distracting background noise.
If you refuse to think rationally, and continue to remain dogmatic at all cost, then you are simply denying yourself the truth. You obviously are not familiar with our monetary policy and how our banking system works.
More or fewer regulations are not the issue at all, because the theory of operation of the banking system and its inherent structure constitutes a non-free market structure.
You take the banking system as was in 1913 after the creation of the FED, and you have a centrally planned banking industry that is tightly controlled and regulated by the FED, regulations since then are always added to compensate for the failure of the previous regulations who usually only make things worse. Of course people like you buy into the propaganda that it's all failure of capitalism and more regulation is needed. If you remove all the regulations you are still left with a centrally planned banking structure! This is why I suggested you guys read a little about how free markets work. You would understand that a free market is self regulating and always tends to be in a stable equilibrium. That equilibrium can only be disrupted permanently by a coercive power (Government), which is what we have with our banking industry. You can remove all the regulations you want, and guess what? You still don't have a free market. Besides, let's keep it simple here with things that are more obvious:
What is the point in regulating anyway if your government has had a policy of subsidizing and literally forcing (Community reimbursement Act) bad loans. What is there to regulate then if most of these bad loans are bound to default anyway. If you wanted to give mortgages only to people who deserve it, you would have left it to the market. If the market was so irresponsible why did congress have to force a socialistic policy to subsidize mortgages. It's been like this since FDR and it has gotten worse and worse. It is these inconsistencies that you should have realized even with out full knowledge of how banking works. What you don't realize is that a central bank (FED) with a coercive monopoly over the money supply is incompatible with free markets. Since 1971 when we went off Gold completely, we are on pure FIAT money and the FED is creating money out of thin air all the time to finance government deficit or to stimulate the economy (Greenspan ever low 1% interest rates). I won't get into why this is directly related to the current situation but believe me it does, it is the heart of the problem and was always the cause of ever boom and bust cycle we had had. It is a fraudulent system where government is in bed with the banking system (Cartel of banks in reality). So regulations is bull [deleted]!
Yet you are so determined to exploit the situation in condemning free markets and capitalism, the only reason we still have some prosperity in this country despite the ever growing government and its devastating monetary and fiscal welfare policies, that you are turning to the chief culprit to rescue you from the evil free market which never existed. You actually believe politicians and their well paid experts on TV when they blame unregulated capitalism. Don't be pathetic, like the Germans in the 20's and 30's when they believed Hitler that it's all the Jews fault!
Gold Money Is the Root of All Good; Paper Money Is the Root of All Evil
Google: AYN RAND'S HYMN TO MONEY
The notion that the rest of us need these greedy elitist egoist capitalists is pure horse [deleted] fantasy. We could wipe the top 5% of the elites out, distribute their 85% of the world's wealth to the remaining 95% of the world's population and everyone would be far better off, and trade and commerce would still happen, and flower anew. Society is, and always will be, a cooperative venture - and those who read Ayn Rand and then use that half-baked philoso-fantasy as a salve to excuse their greedy egoist hucksterism, as they turn a quick buck and screw their neighbor blind, are criminals.
Ayn Rand's economic theory is even more flawed than Milton Friedman's - it's all glorious schoolgirl fantasy, not merely half-baked economics, but also the stuff of terribly crappy novels. In Rand's case, she can neither think nor write well, and has long ago earned her place on the great trash-heap of failed philosophy and failed literature.
"Didn't he read US history??? Laissez Faire didn't work in the late 1800s early 1900s and it'll never work. Power breeds greed. It's just what happens. DUH!"
"Power breeds greed." Does this not apply to government power? I think it is you who ought to be reading U.S. history.