Posted on 11/01/2008 2:29:42 PM PDT by CE2949BB
Washington, D.C. --Opponents of the free market are giddy at Alan Greenspan's declaration that the financial crisis has exposed a "flaw" in his "free market ideology." Greenspan says he is "in a state of shocked disbelief" because he "looked to the self-interest of lending institutions to protect shareholder's equity"--and it didn't.
But according to Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “any belief Greenspan ever had in truly free markets was abandoned long ago. While Greenspan long ago wrote in favor of a truly free market in banking, including the gold standard that such markets always adopt, he then proceeded to work for two decades as leader and chief advocate of the Federal Reserve, which continually inflates the money supply and manipulates interest rates. Advocates of free banking understand that when the government inflates the currency, it artificially increases prices and causes booms in certain sectors of the economy, followed by inevitable busts. But not only did Greenspan lead the inflation behind the dot-com bubble and the real estate boom, he blamed the market for their treacherous collapses. Greenspan should have recognized that what he wrote in 1966 of the boom preceding the 1929 crash applied here: ‘The excess credit which the Fed pumped into the economy spilled over into the stock market--triggering a fantastic speculative boom.’ Instead, he superficially blamed ‘infectious greed.’
“Should it be any shock that Greenspan now blames the free market for today's meltdown--rather than the Fed's policies, which fueled an inflationary housing boom, which rewarded reckless lenders and borrowers from Wall Street to Main Street? Greenspan didn't mention the word ‘inflation’ once in his testimony.
“Whatever Greenspan's economic philosophy is, it is not anything resembling a free market.”
AMEN. Greenspann trying to keep the invitations open to the GTown cocktail parties is all!
Just about the time he married that socialist.
yitbos
Major misconception there. You can have a free credit market without the gold standard. Pretty much labels this whole article B.S.
Just like Obama never heard his preacher speak hate in over 20 years of sitting there listening. Probably never read Michelle's college thesis either.
Yeah, well, what really happened is two things:
1. Everyone brought into risky, unproven instruments to make short term results look good—without any regard for the long term consequences.
2. Lenders junked their own standards to be Politically Correct (PC) and curry favor with the political class
Both things herald the triumph of spin over substance in American life. In the past, this has been par-for-the-course in Academia (social sciences), but the rot has finally reached science (Global Warming) and business (subprime loans so “everyone” can own a house). And this is what we get.
Ah, but don’t worry Alan, Government will bail us out. Actually, the Chinese will bail out Government so they can bail us out. Give it another 20 years, we’ll just hand Hawaii, Alaska, and the West Coast over to our creditors just to get a break on the interest rate.
Greenspan's article in 1966 says that a gold standard helps to limit:
1) confiscation of wealth
2)chronic deficit spending
3)paper reserves in the form of government bonds
4)irrationally excessive economic booms
That was the point he was trying to make.
A lot of folks don’t seem to know that Greenspan was associated with Rand 40 years and more ago.
Calm down. China isn’t taking over anything.
Greenpan has been out of office for sometime!!
The gold standard didn't prevent ANY of those things.
So what? How did it affect his actions?
Young Al was faced with a choice; You can have principles or you can have power. He chose unwisely.
Calm down. China isn’t taking over anything.
I didn't say it did. It does prove that he wasn't acting out of ignorance.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.