King of the Economic Zombies returns: Alan Greenspan
Alan Greenspan has returned and is trying to be the Grand Poobah of economics again. Hasn’t the world endured enough of his Randian ideology and resulting actions that led to the meltdown of the entire global financial markets? Here’s Paul Krugmans’s response : Some people have asked me for reactions to this piece by Alan Greenspan (pdf) on how Obama’s activism is preventing economic recovery. I could go through the weak reasoning, the shoddy econometrics that ignores a large literature on business investment and ignores simultaneity problems, etc., etc.. But never mind; just consider the tone. Greenspan writes in characteristic form: other people may have their models, but he’s the wise oracle who knows the deep mysteries of human behavior, who can discern patterns based on his ineffable knowledge of economic psychology and history. Sorry, but he doesn’t get to do that any more. 2011 is not 2006. Greenspan is an ex-Maestro; his reputation is pushing up the daisies, it’s gone to meet its maker, it’s joined the choir invisible. He’s no longer the Man Who Knows; he’s the man who presided over an economy careening to the worst economic crisis since the Great Depression — and who saw no evil, heard no evil, refused to do anything about subprime, insisted that derivatives made the financial system more stable, denied not only that there was a national housing bubble but that such a bubble was even possible. If he wants to redeem himself through hard and serious reflection about how he got it so wrong, fine — and I’d be interested in listening. If he thinks he can still lecture us from his pedestal of wisdom, he’s wasting our time. You may remember when Rand Greenspan made a pretty shocking admission to Rep. Waxman Waxman: Then where do you think you made a mistake? Greenspan: I made a mistake in the presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders… Waxman? Do you have any financial responsibility for the financial crisis? (On his ideology) Greenspan: …to exist you need an ideology. The question is whether it is accurate or not, and what I’m saying to you is, yes, I found a flaw. Zombies who need to eat our brains like Greenspan never go away. Here’s an excerpt from Matt Taibbi’s new book, Griftopia , on Greenspan. Greenspan met Rand in the early fifties after leaving Columbia, attending meetings at Rand’s apartment with a circle of like-minded jerkoffs who called themselves by the ridiculous name of the Collective and who provided Greenspan the desired forum for social ascent. These meetings of The Collective would have an enormous impact on American culture by birthing a crackpot anti-theology dedicated to legitimizing self interest — a grotesquerie called Objectivism that hit the Upper East Side cocktail party circuit hard in the fifties and sixties. It is important to to spend some time of the seriously demented history of Objectivism, because this lunatic religion that should have choked to death in its sleep decades ago would go on, thanks in large part to Greenspan to provide the entire intellectual context for the financial disasters of of the early twenty first century. He was always committed to his Randian beliefs and based US monetary policy on those ideas throughout his career — which of course in the end produced a huge failure. I agree with Paul and that the only time I want to hear from him again is : If he wants to redeem himself through hard and serious reflection about how he got it so wrong, fine — and I’d be interested in listening . Wouldn’t it be nice to see the media and their 24/7 capabilities examine Greenspan’s policies and actions and do it for him since he’ll never come clean?
King of the Economic Zombies returns: Alan Greenspan
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on March 21, 2011. Filed under