Wednesday, November 19, 2008

Greenspan: Proof that Government Corrupts

A few weeks ago I literally shouted out loud in disgust when I read that Alan Greenspan, who was addressing a congressional committee investigating the causes of the mortgage crisis, basically ceded to a that he made a "mistake" during his helm of the Fed, inferring that there was not enough regulation. In fact, Greenspan went so far as to note that "free markets did break down." This, from a guy seen by some as the "High Priest" of capitalism.

Greenspan's recent statements are a far cry from his previous principled stance. For example, in "The Assault on Integrity", an essay included in Capitalism: The Unknown Ideal compiled by Ayn Rand, Greenspan penned:
Government regulation is not an alternative means of protecting the consumer. I does not build quality into goods, or accuracy into information. Its sole 'contribution' is to substitute force and fear for incentive as the 'protector' of the consumer. . . The hallmark of collectivists is their deep-rooted distrust of freedom and of the free-market process. . .
It appears as though Greenspan was either corrupted his time spent in government or that he was leaned on to be a fall guy -- to take some heat from those still in office and still at the helm of the programs and agencies responsible for this mess.

To continue: Is our present situation a result of market failure? I think not. To oversimplify just a bit, fiat money and government programs that distorted the market and produced unintended consequences are to blame. Fortunately some smart folks have already done great work explaining why this is the case, such as those over at The Austrian Economists blog. Also, check out this video featuring Peter Shiff who in 2006 made a pretty accurate prediction on this issue (as did others years ago, but they were dismissed by politicians and bureaucrats):

2 comments:

Paul said...

I especially like the end of that quote: "At the bottom of the endless pile of paper work which characterizes all regulation lies a gun."

aberfoyle said...

Greenspans admission that (his theory was wrong) is akin to Nixon, stating that he did make errors of judgment whilst president. Nixon paid the price, and departed this mortal coil a sad and beaten man.Greenspan on the other hand as the old cynical maxim goes (has been promoted to his level of incompetence).God bless America and god help it to.