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After Previously Praising Her, Paul Ryan Now Disses Ayn Rand...

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If all he did was head that agency thinking "someone has to do this, so i might as well do it as best it can be done", that would be less of an issue.

Is mere participation in the American government automatically a violation of Objectivism?

It isn't just that he gave up trying. Rather, he headed the agency that helped undermine the financial system. I do not even grudge him that. If all he did was head that agency thinking "someone has to do this, so i might as well do it as best it can be done", that would be less of an issue. However, he did much more. He championed so-called free-market changes, while not screaming that these changes ought not be made as long as government guarantees remain in place.

What should he have done instead?

Edited by Nicky
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Is mere participation in the American government automatically a violation of Objectivism?
Most definitely not. Nothing I said was meant to imply anything close to that.

What should he have done instead?
Greenspan should have resisted allowing government-underwritten banks to take on the amount of risk they did. Instead he seems to have almost consistently championed the so-called free-market changes, which were putting tax-payer money at risk. A lot of this seems to have been ignorance on his part. He seemed to think that the profit-motive implied that banks would be safer: ignoring all the bank failures and financial crises of history, and thinking in an extremely rationalistic way.

Greenspan grew too comfortable with his role as maestro of the monetary system, basking in undeserved glory and praise that came during a time when what he was doing was actually of little relevance. Then, when the true test came -- post internet bubble -- he failed miserably. He lowered rates and kept them too low. When people started to use their homes as ATMs, by taking out new mortgages and using some of the cash for expenditure, this was not a side-effect of Greenspan's policies: it was one of the objectives he sought to attain on purpose. After years of playing maestro, he did not want to be like Paul Volcker -- taking on the world was never a Greenspan trait. He seems to have become just like Stadler -- it was no longer about doing the best within a bad system, but about receiving praise from people he would have once despised.

No single person can be blamed for the huge mess our economy is now in, but if you had to choose one from the last few decades, it would be Alan Greenspan. That is his true legacy.

Edited by softwareNerd
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Most definitely not. Nothing I said was meant to imply anything close to that.

Ok, so what would be the problem if Greenspan took the job, but did the best job anyone could possibly do?

(you said that you would have less of a problem with that-which I am reading to mean you still have a problem with it)

Greenspan should have resisted allowing government-underwritten banks to take on the amount of risk they did.

Instead he seems to have almost consistently championed the so-called free-market changes, which were putting tax-payer money at risk. A lot of this seems to have been ignorance on his part. He seemed to think that the profit-motive implied that banks would be safer: ignoring all the bank failures and financial crises of history, and thinking in an extremely rationalistic way.

Greenspan grew too comfortable with his role as maestro of the monetary system, basking in undeserved glory and praise that came during a time when what he was doing was actually of little relevance. Then, when the true test came -- post internet bubble -- he failed miserably. He lowered rates and kept them too low. When people started to use their homes as ATMs, by taking out new mortgages and using some of the cash for expenditure, this was not a side-effect of Greenspan's policies: it was one of the objectives he sought to attain on purpose. After years of playing maestro, he did not want to be like Paul Volcker -- taking on the world was never a Greenspan trait. He seems to have become just like Stadler -- it was no longer about doing the best within a bad system, but about receiving praise from people he would have once despised.

No single person can be blamed for the huge mess our economy is now in, but if you had to choose one from the last few decades, it would be Alan Greenspan. That is his true legacy.

Most of this is speculation about his motives and psychology. I don't find it compelling at all. The one thing I agree with is that Greenspan did indeed continually argue for the deregulation of the financial system, and that some (not all) of that deregulation lead to the horrible risk taking.

But I would note that Alan Greenspan did not engineer this deregulation. He argued for it, but he had nothing to do with the specifics. The deregulation was done by the politicians, and it wasn't a result of any one person's deliberate planning, but rather of haggling and compromises between the various parties and interest groups.

And, finally, I would argue that deregulation, if done smartly, can be beneficial. I disagree that Greenspan's general push for deregulation, even in the context of fiat money, is a bad idea. There is still plenty of room for deregulation.

The "other factor which contributed" to this crisis were the post 1999 FED policies, which encouraged borrowing. But the fact is, those policies didn't cause this. The regulatory policies enacted by the politicians caused this. They contributed by inadvertently hastening the inevitable (the way driving at 70 mph in a 60 mph zone contributes to a full frontal crash with a drunk driving at 120 mph). Sure, the Fed took some extra risks after the Internet bubble, after 9/11, and during the Iraq war. But nothing that would warrant blaming them for this mess.

Greenspan grew too comfortable with his role as maestro of the monetary system, basking in undeserved glory and praise that came during a time when what he was doing was actually of little relevance.

Well, a lot of other central bankers failed to do that "easy stuff", in other places. So I don't think the praise was entirely undeserved. The US economy was going quite well for quite a while, while other economies were struggling.

Edited by Nicky
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No single person can be blamed for the huge mess our economy is now in, but if you had to choose one from the last few decades, it would be Alan Greenspan. That is his true legacy.

The "other factor which contributed" to this crisis were the post 1999 FED policies, which encouraged borrowing. But the fact is, those policies didn't cause this. The regulatory policies enacted by the politicians caused this. They contributed by inadvertently hastening the inevitable (the way driving at 70 mph in a 60 mph zone contributes to a full frontal crash with a drunk driving at 120 mph). Sure, the Fed took some extra risks after the Internet bubble, after 9/11, and during the Iraq war. But nothing that would warrant blaming them for this mess.

I think it's "agree to disagree" time.

There is an earlier thread, from 2006, that links to an article about Alan Greenspan. One important virtue of this article is that it was written before the recent recession, and so the author cannot be accused of using hindsight to blame Greenspan. I recommend the article.

Edited by softwareNerd
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