She starts out with:
"Through their views on the virtues of free markets and individualism,
Ayn Rand and the former chairman of the Federal Reserve Alan Greenspan
will be forever linked as architects of the worst financial collapse
since the Great Depression."
And concludes with:
"Greenspan long believed in Ayn Rand and the power of free markets to
self-regulate. Unfortunately, we all are paying for his misguided
belief and failure to recognize that perhaps Howard Roark and man's
ego are not the fountainhead of human progress as Rand stated in her
1943 introduction to 'The Fountainhead.' "
Ms. Weiner "is an adjunct professor of economics at George Washington University, where she teaches public economics in the Economics Department and leads a seminar on the financial crisis in the MBA program at the Business School." What "public economics" is, I have no idea. I've never heard that term. It sounds to this philosophically attuned observer like the classic collectivist view of the economy, which basically holds that the economy is a distinct entity that exists apart from the productive individuals that comprise it. That method virtually guarantees bad economic analysis.
In any event, Ms. Weiner has not done her research on either the financial crisis or Ayn Rand, especially Rand's concept of egoism (I'm being generous here). Incredibly, she is considered an expert who "leads a seminar on the financial crisis"! Her major accomplishment seems to be a book regarding Implementing Formulary Apportionment in the European Union, which proposes a way to apportion tax revenues between countries from the profits of multinational corporations. Put another way, she studies ways to maximize government's take from productive enterprises. This establishes her statist credentials, and perhaps explains how she can seriously discuss the financial crisis without any mention of the massive role government policy and political manipulation plays in the mortgage, housing, and banking industries (aside from Greenspan's "errors", which are all Ayn Rand's fault).
It also explains her desperate desire to tie Ayn Rand's pro-individual rights, pro-limited government, pro-capitalist philosophy to a crisis that occurred in the most heavily regulated industry operating in the most unfree market segment of the economy. Her need to discredit Ayn Rand by tying her name to a massive failure of government central planning, as absurd as that is, at least exposes the seriousness with which some statists view the influence of her ideas. A nation of egoists, as Rand defines egoism, would never submit to government controls on so massive a scale as we have today.
Ms. Weiner and her ilk continue to use Alan Greenspan's decades-old intellectual connection to Ayn Rand to spin a web of myths, and I have dealt with this type of dishonesty and injustice before. So have the much more knowledgable intellectuals from ARC such as Alex Epstein and Yaron Brook. As they wrote in November, 2008:
"But why should we take him seriously? Greenspan, while once associated with laissez-faire philosopher Ayn Rand, hasn’t advocated genuinely free markets for decades. Remember, this is a man who for two decades reveled in being, as the New York Times put it, 'the infallible maestro of the financial system.'
Free markets don’t have 'infallible maestros'; they liberate us from such “maestros”--the central planners who have time and again falsely claimed the ability and the right to orchestrate millions of economic lives. Free markets enable each of us to be our own maestro, conducting our own affairs, producing and trading as we judge best, and taking responsibility for the consequences when we fail."
Of course, Ms. Weiner would never consider balancing Greenspan against authentic laissez-faire thinkers such as these two Objectivist "New Intellectuals" in the interests of simple fairness. I've left the following comments, sprinkled with a little well-deserved, if humorous, sarcasm.
9:34PM Nov 20th 2009
Intellectual clarity (an attribute of a true egoist) demands that the financial crisis be viewed in full context.
For example, we have Fannie, Freddie, and Ginnie, three government sponsored enterprises, which bought up the sub-prime mortgages as fast as they could be originated and sold. There is the grossly mis-named Federal Deposit "Insurance" Corp., which rewards and promotes unsound lending practices and drains the responsible banks – a semi-socialist scheme that privatizes profits and socializes losses. The Clinton-Bush affordable housing crusades used covert and overt tactics to undermine and destroy underwriting standards. The CRA, as well as the massive control and regulatory apparatus under which the banks operate, were the means to this end. "Too-big-to-fail" policies, government-imposed "mark-to-market" accounting rules (which drove many solvent banks into artificial collapse), and the government-licensed rating agency cartel (S&P, Fitch, and Moody's, which are protected from competition) are all significantly culpable.
All of this stoked by the 800 pound gorilla, the Greenspan-led central bank money monopoly and its massive money and credit expansion policies. Yet, Greenspan is shocked – shocked – that the heavily regulated, politically manipulated financial services and mortgage industries, operating under a "maestro's" dictates, didn’t act like a free market should!
But, in a monumental act of intellectual evasion (which an egoist would never engage in), Ms. Weiner not only wears blinders, she views the whole mess through a veritable straw. She blames derivatives! Greenspan, it seems, "allowed" the derivatives market to "self-regulate" (to use that ridiculous term) because self-interest is a be-all and end-all - the massive market distorting, coercive government interventions notwithstanding. Of course, a free market by permission is a contradiction in terms. Apparently, the monetary dictator forgot what the "free" in free market actually means, or that real free markets don't guarantee that everyone will act in his own long-term best interest, but rather leaves whoever doesn’t free to bear the consequences of his own actions. Baked into the whole of government policy is the removal of natural market risk and creation of a heads I win, tails the taxpayers lose environment. A real free market rewards good decision-making and penalizes the bad, as a matter of course. But, of course, you first need a real free market.
Blaming derivatives is like blaming skin cells for the ravages of skin cancer, yet we now need an army of central planners who just KNOW how other people should invest their own money. But it's not the innovative financial derivatives market that is the problem. It's what was in these instruments – the flood of sub-prime mortgages that the government-created conveyor belt of bad lending unleashed on the world – and with AAA-ratings to boot, bestowed on them by the rating agency cartel acting under the premise of implicit government (i.e., taxpayer) guarantees.
Everywhere one looks, one sees the intrusive hand of government. So whom do we get to sort it out? Why, the pseudo-free marketeer Alan Greenspan, the bubble-maker who ran the very central planning agency whose very existence he once argued persuasively against, who declared his mistaken "free market beliefs" to be the excuse for his own statist blunders! Ms. Weiner enthusiastically swallows this tripe, declaring with a straight face that the taxpayer bailouts are "incontestable proof that the markets failed". If she had any intellectual courage and independence (attributes of an egoist), she would seek out the judgement of authentic experts on capitalism and free markets (such as those at the Ayn Rand Institute) before writing on a subject that she obviously is quite in the dark about. Instead, like Alice, she prefers her Wonderland world where everything is anything she wishes it to be, which to her is to imagine that "the markets run free from any sort of regulation [in] a wild west style world where ... that lawless culture contributed significantly to last year's financial meltdown."
Ms. Weiner and all of the other Greenspan-discredits-Rand mythmakers need to re-think... Oh, that's right: thinking (the most fundamental of all egoistic attributes) is "not the fountainhead of human progress as Rand stated in her 1943 introduction to "The Fountainhead.' " Oh, well, maybe it's just as well, because as Henry Ford once said: "Thinking is hard work. If it weren’t, more people would do it."
I do agree with her on one thing, though, sort of. "Ayn Rand and the former chairman of the Federal Reserve Alan Greenspan will be forever linked” to the “worst financial collapse since the Great Depression" – Alan Greenspan as the chief architect, and Ayn Rand because she was right.