A long-time cheerleader for deregulation, Greenspan admitted to a congressional committee yesterday that he had been "partially wrong" in his hands-off approach towards the banking industry and that the credit crunch had left him in a state of shocked disbelief. "I have found a flaw," said Greenspan, referring to his economic philosophy [Randian quackery]. "I don't know how significant or permanent it is. But I have been very distressed by that fact."
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"I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.
Alas, Greenspan has yet to hara-kiri himself on national television. Oh well. Yesterday, Digby wrote that the problem with Ayn Rand acolytes, besides the fact that they won't die properly, is that they fail to realize that "unbridled greed and selfishness makes people reckless." This is true, but there is also a perfectly logical reason why Ayn Rand remains a black taint upon all humanity: ownership of our shining city upon a hill is collective. Yeah, look it up. The corporation is a financial instrument with which America's patrician class smears accountability throughout the land. No one person wants full ownership of something as big and complicated as the modern corporation. They would have to be an utter loon. And yet many people who are stuck in Ayn Rand's fantasy universe actually think that the people who run America's financial empire are accountable for the health of their empire. They are not, and they never were. The only people who truly put their financial asses on the line in this "malfunctioning corporation called the USA" are small business owners.
When the hell did we lose sight of this? How did the free market become construed as financial anarchy? There's a lot of talk about how we have privatized gains and socialized losses. To some extent, that's always going to be true. The government is always going to be there, God willing, to bail out large companies in order to prevent recessions. Furthermore, people already socialize their losses by putting their money in stocks and bonds. The government cannot force management to "go down with their ships." Well, it could, but then no one would manage any corporations, and we need corporations to make microwaves and maintain the intertubes. In conclusion, the solution to the boom and bust economy is strong, sensible financial regulation and smaller corporations.
