This has got to be one of the most amazing things I have ever read.
The meat of it is this:
Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”
Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.
“Absolutely, precisely,” Mr. Greenspan replied. “You know, 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.”
Well, the entire economic meltdown hasn’t shocked me. When you believe everyone will just act nicely for no good reason, it shouldn’t be shocking when everything isn’t rosy in the end. What is shocking to me is that the architect of all this modern deregulation (along with Milton Friedman) came out and admitted that it was wrong. I guess he should get a small degree of credit for not gnashing his teeth and blaming poor people and the media, but given his responsibility in this that credit doesn’t go too far in my book. It is fair to say that Greenspan’s realization should (it won’t, but it should) put any pure free market argument to bed for the rest of my life.
In the end, what a weird year. I thought I would see an African American elected President before I saw the ideologue of ideologues, who basically turned this country into a deregulated mess, admit that he was wrong. Guess he figured he only had a few days left to prove me wrong…
8 Responses to Free shock
But… but… but… What about Ayn Rand? LOL.
He could’ve never predicted? Um, yeah. It’s called greed. Moral to love oneself and not moral to care about other people? That doesn’t work. Jackasses: http://en.wikipedia.org/wiki/The_Ayn_Rand_Collective
Next person I see reading Atlas Shrugged on the subway, watch out. Maybe I’ll start carrying around my copy of Capital and throw it at them.
I know it’s dangerous to talk about Her in this crowd, but I wanted to point out that Hilary Clinton was criticized years ago, and this was brought up again during the primaries, for saying that she thought that “the free market” was a dangerous myth. Or something like that.
Ahh, Hillary. If it’s true, it’s too bad your husband didn’t share your view. Too bad your husband the Dem rehired Greenspan the conservative economist to run the U.S. economy. Too bad that economist turned out to be “unaware” and “shocked” that bankers and corporations might be a weeee bit greedy sometimes. Gosh darnit, who could’ve guessed that?
It’s strange though…. I’m pretty sure my 10-year-old niece has already grasped that fact of life. So I better make a more age-appropriate assessment of Greenspan’s reasoning capacity. Yes, it appears he based 20 years of U.S. economic policy on the rationale of a 4 year old.
Then again, that might be an unfair diss to 4 year olds everywhere.
I agree that the free market is a dangerous myth and I can’t count the ways:
One, it’s a myth that we have a free market. The bailout finally smashed that notion, yet people don’t understand bailing out failing banking entities — not taxing wealthier citizens at a higher rate — is socialism.
Two, free market is just like pure democracy would be — the majority rules whether or not it’s doing anything ethical. In a truly free market, we’d be free to sell our [or other people’s] kidneys, etc.
Or free to buy life insurance on people who aren’t us. At least, that’s how This American Life categorized Credit Default Swaps on their “Another Scary Show About the Economy,” which was a really interesting (and terrifying) listen on the financial crash(es).
http://www.thislife.org/Radio_Episode.aspx?episode=365
With Credit Default Swaps, you could bet that a company would fail. And the less healthy a company looked, the more people wanted to bet on it. Until, when it actually failed, like Lehman Brothers, nobody could pay out all the “insurance”.
Or something comparably ridiculous like that.
The free market is definitely a dangerous myth, and I wish Bill knew (or cared) what Hillary apparently did. And I encourage the liberal throwing of copies of Capital at people on the subway — anyone reading Ann Rynd, or just looking like they’d like to.
What I learned about the Free Market is ain’t nothin’ Free!
Or maybe “free” describes the type of fall the stock market experiences every other day.
I’ve been watching all 4 seasons of High Stakes Poker on Youtube, and I really think that -with Phil Hellmuth constantly looking for people to insure his hand when he is all in and Sammy Farha always looking to “do business” instead of playing out the hand normally – Hellmuth and Farha would be the cup of tea du jour. Free Market be damned, flops, turns and rivers be dammned – it’s all about the deals of the moment.
Or maybe people playing cards on TV is more fun since it never affects my “savings”…