Speaking to the FT ahead of a speech to the Economic Club of New York
on Tuesday, Mr Greenspan said that “in some cases, the least bad
solution is for the government to take temporary control” of troubled
banks either through the Federal Deposit Insurance Corporation or some
other mechanism.
on Tuesday, Mr Greenspan said that “in some cases, the least bad
solution is for the government to take temporary control” of troubled
banks either through the Federal Deposit Insurance Corporation or some
other mechanism.
Greenspan is like the antithesis of John Galt so how is this surprising?
The current issue of City Journal argues that the current plans to save big banks will have adverse effects on the viability of smaller banks:
http://www.city-journal.org/2009/19_1_credit.html
Quote:
“Big, government-guaranteed banks aren’t just risks in themselves. They crowd out smaller, healthy banks, hurting the diversification of the financial system that’s important even when we’re not in a financial crisis.”
I never bought the idea of Pax Greenspana, even if he was the architect of sustained national
prosperity it would be frightening to vest that kind of power in one office. Of late he just seems
to be a guy uncomfortable with irrelevance seeking to the limelight when his age dictates he
should be “arranging his affairs”.
Of course, I’m sure his post retirement pronouncements makes it easier among wife Andrea MItchell’s
social circle.
There was nothing more hilarious than the Ayn Rand fan boys and their (very little) sexy dramas. Too bad they brought down our economy.
What’s that famous Ayn Rand quote? “Don’t let the fact that they’re people fool you into treating them as such.” I think that’s it.
Too bad they brought down our economy.
Yeah, it’s too bad that Randian libertarians controlled our government, eliminating every regulation and cabinet department except for State and Defense, abolishing the Fed, and otherwise rendering Congress completely inactive over the last eight years. Rotten shame.
Alex, why did you put “nationalization” in quotation marks? If it comes from a place of liberty then it’s not really socialism?
Fair enough M Utley. I’ll reduce the burden of proof to “argue convincingly.”
I think “Nationalization” is in quote because we tend to think of nationalization as the seizure of valuable assets by the nation, rather than the acceptance of onerous liabilities.
I haven’t heard anybody recommending the “nationalization” of any actually solvent banks, if there are any.
Our mixed economy has produced an intractable situation where either the insolvent banks own the government, or the government owns the insolvent banks.
Right now the insolvent banks own the government.
Even an objectivist can see that taking over those frankensteinian zombie banks, splitting up their assets and turning them over to well-managed banks is rational and preferable to a few grotesquely incompetent, borderline criminals retaining ownership of a large chunk of the financial system.
And yes, I realize the public choice ramifications are the installation of a pernicious set of incentives. But we already have them, so the way out has to be through, unfortunately.
> The Pimp of Pimco (a.k.a Bill Gross) has been loading up on this paper and then running to CNBC to talk up bailouts.
I just wanted to say this again, in case someone wasn’t listening. This is how the financial system allocates capital in a capitalist society
It’s kind of cool to see the hard-core Randians using the exact same logic to try to avoid any blame being cast on laissez-faire here as the hard-core Communists used when the Soviets fell apart.
Alex,
I’m with Gardner (above), don’t defile Rand because greenspam was once thought for himself; that is, independently of his pinko wife. Nice post though; all sorts of snakes came out of the bushes you beat with your juxtaposition of night and day.
How appropriate is this headline really? Yes, he was close to Rand but it’s more than forty years, I think, since he wrote anything as an Objectivist. Rand died five years before Greenspan became Chairman of the Federal Reserve, and in that role he might have been libertarian-inclined but did not act as an Objectivist, so it’s not news now that he sees some role for government involvement.
Are you aware that Greenspan wrote an article *totally condemning* the Federal Reserve back when he was a follower of Rand’s?
Individuals evolve as time goes on. That he associated with Rand in the 1960s in no way implies he was acting as an Objectivist in the past 20 years.
The current issue of City Journal argues that the current plans to save big banks will have adverse effects on the viability of smaller banks
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