12 October 2008

"The Reckoning ~ Taking Hard New Look at a Greenspan Legacy"

"If Mr. Greenspan had acted differently during his tenure as Federal Reserve chairman from 1987 to 2006, many economists say, the current crisis might have been averted or muted.
Over the years, Mr. Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences."
For the past several decades Alan Greenspan, right wing ideologue, has been viewed as something of a saint among various administrations - Republican and Democratic. He preached free market "principles" in an unbending and, as is now clear, wholly idiotic way. As part of a series on our financial crisis The New York Times recently ran this re-assessment of the Greenspan regime and is dire consequences.* Of course, the right will howl that hindsight is easy or that casting about for blame is unproductive. But let's be clear, there have been voices of dissent all along. And Greenspan and his fellow travelers simply painted those who expressed doubts as liberal alarmists. Most importantly, if we cannot identify with some confidence the causes of our current mess, we will not be able to reliably construct institutions and craft policies that will make repeats less likely.
Is Greenspan - along with his acolytes - wholly responsible for our current dire economic situation? Clearly not. But he gave ideological cover to politicians and financiers who connived in the pro-market, anti-regulation politics of successive administrations. In so doing he distorted what economists actually know about macro-economic policy and the circumstances under which markets work well.
Greenspan, like many right wingers, wants to blame the current crisis on the mis-behavior of a few individuals. That is like saying that the torture at Abu Ghraib was the fault of a few enlisted men and women. In other words, it is bullshit pure and simple. We know the Abu Ghraib crimes were the result of systematic policy formulated and advanced by BushCo. So too, the opportunistic, self-seeking behavior that Greenspan et. al. now want to condemn is precisely what their free market ideology pushes. (Greenspan is among the few people beyond their teens who seems to lend credence to the nuttiness peddled by Ayn Rand.) For them markets are morality free zones; there is no obligation - ethical, political or otherwise - on the part of individuals or firms operating in markets to do anything beyond maximize payoffs to themselves. This is a silly view of markets, but it is the caricature peddled by the right in this country. And now everyone gets to experience the consequences.
* The epigram and images in this post are lifted form The Times story. Here are the caption and photo credits: "THROUGH FOUR ADMINISTRATIONS Mr. Greenspan had the ear of Washington from 1987 to 2006. He was sworn in by President Reagan, top, and was kept on by new presidents of both parties." From top, Barry Thumma/Associated Press; Doug Mills/Associated Press; Mario Tama/Agence France-Press; Win McNamee/Reuters.

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