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Alan Catches The Vapors October 30, 2008

Posted by Dwight Furrow in Current Events, Dwight Furrow's Posts, Ethics, Political Philosophy.

Since the collapse of our financial markets, I have been ranting (here and here) about the “moral philosophy” of conservatism that assumes that the wealthy and successful are inherently virtuous because they are wealthy and successful. Last week we witnessed this “philosophy” in mid-befuddlement.

Alan Greenspan, former Chairman of the Federal Reserve, and one of the architects of the deregulated, overleveraged environment that caused the credit crisis, was tesifying before a house committee.

Poor Alan. His economic models didn’t allow for the possibility that greedy people left to their own devices would undermine the system on which they depend. Greenspan said that he was “in a state of shocked disbelief” that banks did not properly analyze the risk of loaning money to unqualified borrowers, and he acknowledged that the failure of self-regulation was “a flaw in the model”.

“I was going for 40 years or more on the perception that it was working well”, he lamented.

So let me get this straight. For the past 40 years, we have watched inequality explode, the real income of the middle class fall, government rescues of a variety of financial institutions, entire industries shipped overseas replaced by an economy based on debt, massive market failures in Chile, Argentina, Asia, and Mexico, and wholesale corruption exemplified by Enron. Despite all of this evidence that unregulated markets fail, Greenspan finally wakes up when the United States is on the verge of economic collapse.

The best explanation of this fefuddlement is that, following his mentor Ayn Rand, he really believes that people become wealthy and sucessful because they are morally superior; and being morally superior that would never seek ways of absconding with enormous profit while shoving the risk off on the American taxpayer. It is only plebian scoundrels that need laws and regulation.

Perhaps this recent episode in our economic history will put this “moral philosophy” to rest. But the prospects for that are not so good. Rand, of course, can no longer spew her nonsense; she has been replaced by the much more charismatic Joe the Plumber who is dispensing this moral philosophy on the campaign trail for that other fount of moral wisdom, Sarah Palin and her sidekick John McCain.



1. Paul Moloney - October 30, 2008

Despite the overwhelming evidence that greed is a cause of ignorance, so many people seem to emulate the greedy.

I might consider Ayn Rand to be more of a social thinker than a philosopher. I might have been prejudice toward her before I read some of her work. When I put her in a certain context, I found myself having an admiration for her. She was far from being the typical Russian. First of all she was a Russian that could think for herself and, secondly, she was a woman that could think for herself. In a time when the Russian people were not allowed to think for themselves, she was outspoken, albeit in America. She took the initiative to leave Russia when she had the chance. I have to believe that much of her writing was a reaction to Czarist Russia and the Communism which it caused, as Communism in Russia seems to have been a reaction to the previous Czarist Russia. I think that she associated freedom with capitalism. I might think she overreacted to a certain Russian mentality, but, then, I have never experienced life in Russia.

The more I read the more I find that I like people with whom I disagree.

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