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Allan Greenspan

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What do Objectivists generally think of the Fed Chair? I know his history with Ayn Rand. What the reason why he strayed from Objectivist principles? Was it just that he really didn't intergrate the ideas or was he an evader or a combination? thoughts?

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I reccomend The Man Behind the Money (and I apologize, for I do not have the author's name, or the book with me). It doesn't explicitly answer your questions but may shed some light and has an ample chapter discussing Greenspan's relationship with Ayn Rand and Objectivism.

I think it is an atrocity that his position must exist. Some will argue that his is "pulling a Francisco" and will use his position to destroy economic controls, others that he will return us to the Gold Standard. However, this is a very blind kind of optimism and I see no evidence to support it.

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Some will argue that his is "pulling a Francisco" and will use his position to destroy economic controls, others that he will return us to the Gold Standard.  However, this is a very blind kind of optimism and I see no evidence to support it.

Elle, if that was his plan he would have acted by now. Its way past the point to have any hope for Greenspan. The man loved political power more than his professed principles. He could have used the 'bully bullpit' of the Fed Chairman for close to 20 years to advocate free market reforms for just about everything. But he chose to denounce 'irrational exuberism' instead.

Don Luskin wrote an awesome blog entry on his website about a year and a half ago where he likens Greenspan to Dr. Robert Stadler for AS. It was one of the best pieces on Greenspan that I have ever read. I linked to it in a previous thread on the Fed Chair. Do a search if you want to read it.

Greenspan must be a broken man inside. He betrayed every principle he claimed to have held. He wasted a history changing opportunity. He could have been an 'Objectivist mole' in the US government. But he learned the corrupting influence of illigitimate political power.

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I think Mr Greenspan took the position with strong intentions, intentions akin to Objectivist principles. However, it may be the case that he has seen how delicate the balance is: how closely related fiscal stability and global stability are; 'Atlas Shrugged' aka 'The Strike' presents an interesting hypothesis; but with a USSR armed to the teeth, and China following suite such a strike would have had dire ramifications. Could it be that, albeit as a broken man (realizing the limited power of his position), that Mr Greenspan simply puts a limit to the kind of economic controls that would be in place otherwise. The man may not have made any decent changes in the right direction; but we dont know what he has prevented.

We can criticize American Government for a lot of things, but comparing it to the rest of the world its on a higher rung climbing down... The sort of chaos that would ensue a major change might make it vulnerable to its enemies and competitors...

In reference to the last thread that dealt with this Mr Greenspan once responded to a Senator in a public debate that he believed in the Gold standard. He may still hold that ideal; but the cost of implementing in such an obvious way may far outweigh the benefits.

Of course I could be completely wrong, and the guy could have sold out years ago.

But perhaps, a decent opportunity for general change can only occur once the change can effect everybody...perhaps global governence, or the dictate of the IMF could be the only viable way of drastically changing fiscal policy from the top...

If change comes from the top, that may be the only way. That doesn't mean its right.

Change may come from the bottom. Us.

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Could it be that, albeit as a broken man (realizing the limited power of his position), that Mr Greenspan simply puts a limit to the kind of economic controls that would be in place otherwise. The man may not have made any decent changes in the right direction; but we dont know what he has prevented.

Well said Charles!! Great post.

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interesting article at http://www.reuters.com/financeNewsArticle....storyID=5544527

"Yes, I did have my differences with the chairman ... but the point is that we were all learning together as the world's economies whipsawed about," Meyer writes.

Meyer credits Greenspan with being the first to recognize that the pace of U.S. productivity growth had picked up appreciably in the mid-1990s, allowing the U.S. economy to grow faster without igniting inflation.

A few years ago, I think it was Richard Salsman who did so, Greenspan was described as a Keynesian. This tripe from Meyer does nothing to disprove that. Given that Greenspan knows that inflation is an excessive issue of currency and is not a general rise in prices 'ignited' by economic growth, I think that we can conclude Greenspan sold out long ago.

An ARI writer, could have Salsman again or Robert Tracinski, described Greenspan as a political chameleon which , in my view, would make him Robert Stadler with a touch of Alvah Scarrett.

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Elle, if that was his plan he would have acted by now. Its way past the point to have any hope for Greenspan.

Yes Argive I agree with you, which is why I said in my previous post that those beliefs (that Greenspan may "pull a Francisco") hold a kind of blind optimism.

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'Atlas Shrugged' aka 'The Strike' presents an interesting hypothesis; but with a USSR armed to the teeth, and China following suite such a strike would have had dire ramifications.

The point of the strike is to have dire ramifications, for the looters.

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From browsing through Bob Woodward’s "Maestro", I gathered the following:

Greenspan was a close friend/associate of Rand but never an Objectivist. Rand admired him for his intelligence, quick-mind and economic insights but they debated various issues. I think it was Branden who gave him the nickname "Undertaker", because he maintained that his existence was not absolutely certain. Although he eventually admitted that he did exist. He frequently attended social functions and appeared to Rand a little preoccupied with his status among the elite.

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I have now read Don Luskin's articles on Alan Greenspan, and it certainly makes some interesting points. Invictus, your account seems most plausible.

(Charles @ Aug 9 2004, 03:31 AM)

'Atlas Shrugged' aka 'The Strike' presents an interesting hypothesis; but with a USSR armed to the teeth, and China following suite such a strike would have had dire ramifications.

Elle: "The point of the strike is to have dire ramifications, for the looters."

Yes, however my point is that in reality such a strike would be suicide, unless you have yourself a self-sufficient Galt's Gulch complete with thermonuclear protection.

And Im afraid I dont. :)

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Greenspan was a close friend/associate of Rand but never an Objectivist. Rand admired him for his intelligence, quick-mind and economic insights but they debated various issues. I think it was Branden who gave him the nickname "Undertaker", because he maintained that his existence was not absolutely certain. Although he eventually admitted that he did exist. He frequently attended social functions and appeared to Rand a little preoccupied with his status among the elite.

You mean Rand allowed herself to have a professional relationship with [gasp] an irrationalist? ;)

Sorry, couldn't help it.

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Alan Greenspan, by the way, is a Libertarian and contributed to the

banking and monetary improvements sections of the NESARA law; his Doctoral

Thesis was on the value of gold-backed currency.  His longtime dream has

been to see the U.S. return to a Constitutionally correct banking and

monetary system backed by precious metals.

Compete article

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Alan Greenspan's magnificent essay “Gold and Economic Freedom” appears in Ayn Rand’s 1967 book Capitalism: the Unknown Ideal. In the essay, Greenspan argues brilliantly and uncompromisingly for a gold standard and against a central (government) bank:

When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one -- so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the [pre-Fed]system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled.

Two years ago gold-advocate Congressman Ron Paul wrote Chairman Greenspan a letter than included the following question:

I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)'s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency . . . I would greatly appreciate an explanation from both the Treasury and the Federal Reserve of the reasons the United States has continued to acquiesce in this misguided policy. 

http://www.house.gov/paul/congrec/congrec2002/cr053102.htm

Rep. Paul never received an answer.

As Ayn Rand would say, “blank-out.”

I think Mr Greenspan took the position with strong intentions, intentions akin to Objectivist principles. However, it may be the case that he has seen how delicate the balance is: how closely related fiscal stability and global stability are; 'Atlas Shrugged' aka 'The Strike' presents an interesting hypothesis; but with a USSR armed to the teeth, and China following suite such a strike would have had dire ramifications. Could it be that, albeit as a broken man (realizing the limited power of his position), that Mr Greenspan simply puts a limit to the kind of economic controls that would be in place otherwise. The man may not have made any decent changes in the right direction; but we dont know what he has prevented.

Well, clearly what Greenspan has prevented is monetary stability and the “commodity of objective value” (Greenspan’s own phrase) that he explicitly recommended when he contributed to Rand’s book on capitalism. What he has prevented, as the chief curator of fiat money, is any possibility that the average citizen could “protect savings from confiscation through inflation” (again Greenspan’s own phrase). If it is your position that the U.S. must make “gold and economic freedom” subordinate to building the war machine against Russia and China, why not return to the gold bullion prohibition imposed by FDR?

On April 5, 1933, Roosevelt commanded all citizens to surrender their gold to the government. No citizen was permitted to own more than $100 in gold coins, except for rare coins with special value for collectors. Morgenthau announced on the same day that "gold held in private hoards serves no useful purpose under present circumstances." 5 Gold was thus turned into the same type of contraband as Prohibition-banned rum.

http://www.libertyhaven.com/regulationandp...greatgold.shtml

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When Greenspan testified last week before the US Senate Committee on Banking, Housing, and Urban Affairs, the notoriously obtuse chairman was quite succinct. According to Greenspan:

"Why did corporate governance checks and balances that served us reasonably well in the past break down? At root was the rapid enlargement of stock market capitalizations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice. An infectious greed seemed to grip much of our business community. Our historical guardians of financial information were overwhelmed. Too many corporate executives sought ways to "harvest" some of those stock market gains. As a result, the highly desirable spread of shareholding and options among business managers perversely created incentives to artificially inflate reported earnings in order to keep stock prices high and rising. . .

. . . It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously."

I am going to go out on a limb and say that Greenspan is not an Objectivist.

Mr. Greenspan (since I know simply telling you won't do)

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When Greenspan testified last week before the US Senate Committee on Banking, Housing, and Urban Affairs, the notoriously obtuse chairman was quite succinct. According to Greenspan:

"Why did corporate governance checks and balances that served us reasonably well in the past break down? At root was the rapid enlargement of stock market capitalizations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice. An infectious greed seemed to grip much of our business community. Our historical guardians of financial information were overwhelmed. Too many corporate executives sought ways to "harvest" some of those stock market gains. As a result, the highly desirable spread of shareholding and options among business managers perversely created incentives to artificially inflate reported earnings in order to keep stock prices high and rising. . .

. . . It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously."

I am going to go out on a limb and say that Greenspan is not an Objectivist.

Mr. Greenspan  (since I know simply telling you won't do)

I would have to say, from your bold emphasis, that it doesn't really jusify saying that Greenspan isn't an Objectivist. Greenspan could have meant the subjectivist form of selfishness. From what I know about Greenspan he is a very private man so to say he is or isn't an Objectivist would be very hard for me to say. I have decided to wait and see what he has to say in his autobiography, if he release’s one, before I make any Judgements about him.

Ash :D

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1. He is a sell out.

2. He is working to improve the system from within.

3. There is a third option.

Certainly Rand and Greenspan were mutually impressed by each other. And it seems that she tolerated much of his life decisions.

But he was certainly, and Rand admired this, in love with economics. What better job for a man than to be involved in the economics of a nation? He must have some dreams. But I'm sure that his role as Economic Dictator has given him a laboratory of a life time ... especially since we might be in the midst of the "last days of Rome."

All we got is to remember and learn from those few essays. But he was there during the writing of AS. (I know so was N.B. but Greenspan is different ... he's a politician.)

I could never be a politician. But some who see our vision may still want to get involved. Only those who know of some Atlantis, of these "good" politicians, will opt out.

Americo.

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In an effort to silence forever those pesky cranks who call themselves monetary libertarians, Federal Reserve Board Chairman Alan Greenspan has announced a new do-it-yourself dollar. Appropriately called the Greenspan Greenback, the new one-dollar specimen sports Chairman Greenspan’s likeness not merely once, as with good ‘ol George, but 12 times.

“Critics of the Fed’s very existence, from Rep. Ron Paul [1] to the loose cannon known as the Mogambo Guru [2], not to mention all the revisionists at the Mises Institute [3], will now have the opportunity to see for themselves what temptations a fiat dollar offers,” Mr. Greenspan stated in a press release. [4]

“Specifically, I have been accused of irresponsibly expanding the money supply to favor special interests at the expense of the general population, bringing special harm to those of limited resources and political influence. In turn, certain individuals have ludicrously blamed the Fed’s accommodative monetary policy for driving prices up, enlarging the size of government, growing the federal debt, making us more dependent on foreigners, fostering entrepreneurial error, creating bubbles in stocks and housing, and depreciating the value of the dollar to the point where few people save anything at all and are, therefore, either broke at retirement or have their funds tied up in shaky investments.

”With the Greenspan Greenback, as my colleagues at the Fed have dubbed it, these critics, along with everyone else who holds U.S. dollars, can now conduct their own monetary policy.

“The Greenspan bill is separated into 12 regions, in honor of the 12 regional federal reserve banks. Each region on the bill is delimited by a perforated line and is equal in value to one Greenspan Greenback when torn off. Thus, if the holder of the bill has a need for more buying power but comes up short on funds, he can, at his discretion, adopt the policy the Fed has followed for over 90 years. He can literally create money from nothing by tearing off a region and substituting it for a full-sized dollar. The Greenspan Greenback will, we hope, spawn more dollars, but only as the needs of the economy dictate. It will, in other words, mimic the larger policy of the Federal Reserve.

“People are strongly urged to put their special interests aside and consider the economy as a whole in deciding whether or not to pump more dollars into circulation. Dollar bearers will now have the opportunity to restrain themselves from making frivolous purchases, just as we at the Fed, through our open market operations, restrain ourselves from needlessly purchasing government securities. Of course, as we all realize, it is sometimes necessary to sacrifice better judgment for the sake of propping up government or friends of government, but this amounted to an increase in the money stock of only a few trillion dollars over the course of my tenure.

“It should be stressed that this special bill will be printed in dollar denominations only. To allow ordinary citizens perforating rights on higher denominations would undermine the elitist philosophy of government that Progressives and Big Business substituted in the early Twentieth Century for the nakedly selfish ideology of the Founders. We want to reassure investors that broad monetary movements will still be under control of public-spirited bankers at the Fed, thus assuring continued economic stability and growth.

“I would be less than candid if I didn’t make known my expectations of this little experiment. Unlike people who serve in government or government-sponsored entities such as the Fed, and the $2.4 trillion federal budget notwithstanding, private sector types have a reputation for wanting to acquire more money. Some will work two or three jobs, others will work for multiple advanced degrees to increase their intake of dollars. While this is admittedly necessary behavior for a host if it is to successfully support a bloated parasite such as government, it is crudely self-interested in manner.

“It is, of course, to keep us from acting in our self-interest that government exists in the first place. Without the restraint of government, the world would be rife with war and looting.

“Thus, the nature of private sector participants being what it is, the chance to get more money by tearing along a perforation will be too tempting to resist. Consequently, it is my expectation that immediately following the dollar’s release, the dollar supply will have expanded by exactly 12 times the number of Greenspan Greenbacks issued, with prices inflating mostly in cosmetics and entertainment, the two categories where, given a few extra bucks, the masses like to splurge.

“I hope I am proven wrong, and if I am, an apology will be forthcoming. But if my expectations are proven correct, I would like my libertarian critics to admit that given the ease with which the banking system can create money, we have shown admirable restraint. Who could do any better? Though gold and free market banking would be ideal, as they assert, it would put an end to big government. They know as well as I do that’s not going to happen.

“Truth has become a kind of fertilizer; it is defined as whatever makes government grow. Therefore, fiat money and central banking are two of the most unshakable truths known to modern man. Government would no sooner get rid of them than the Pope would dump God.

“To pine wistfully for a day we will never see is self-defeating. We at the Fed have made peace with Leviathan and are profiting handsomely from it. I encourage my critics to do likewise.”

Article by George F. Smith

I think it's clear what Greenspan is, and what he isn't

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From Rep. Ron Paul (R-TX):

“I had an opportunity to ask [Greenspan] about his change of heart when he appeared before the House Financial Services committee last week. Although Mr. Greenspan is a master of evasion, he was surprisingly forthright in his responses to me. In short, he claimed he was wrong about his predictions of calamity for the fiat U.S. dollar, that the Federal Reserve does a good job of essentially mimicking a gold standard, and that inflation is well under control. He even made the preposterous assertion that the Fed does not facilitate government expansion and deficit spending. In other words, he utterly repudiated the arguments he made 40 years ago.” (February 21, 2005)

http://www.house.gov/paul/tst/tst2005/tst022105.htm

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He was appointed chief of the board in 1987 by Ronald Reagan. The structure is complicated. He is head of the other 6 members in the Board of Governors. Alongside the 9 directors of the banks.

What if the whole board is the most evil institution to infiltrate into America? What if there were one man of good intention that managed to assume the highest possible position to keep the organization in check? What if these 9 directors manipulated the system to do their bidding as they print off an unlimited supply of money at the expense of all Americans? What would these people then be able to do if they bought their way into the CIA?

What if the real situation at hand is 10x worse than this?

Do some research.

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