Alan Greenspan and the Great Gaffe

You remember Alan Greenspan right?  He is the former chairman of the Federal Reserve.  He also happened to be completely smitten with the philosophy of Ayn Rand.  Greenspan took Rand’s notions of libertarianism and an unregulated government to their logical conclusion and applied them to our financial system.

His mantra became:  Deregulate.  Deregulate.  Deregulate.  He had such complete faith in the principles of free enterprise that he believed that the market would regulate itself.  Thus negating the need for any government regulation.  Greenspan believed that the immoral human actions of fraud and manipulation would be kept honest by the free market and the purchasing power that the average American consumer had.  Unfortunately the average American consumer has become so brainwashed by corporate media, corporate advertising and corporate politics that most people simply have no idea of that which is in their best interest.

Imagine what the philosophy of deregulation might look like if a kindergarten teacher began to implement it in the classroom.  To begin, the most ambitious and demanding child would take over control from the teacher.  The teacher might be a little shocked at first, but then shrug his shoulders and assume that the rest of the class would assert themselves stating their needs when they arose.  This would be his second mistake.  Shortly after asserting control, the dominant child would begin to make demands of the other children.  Bring me this toy.  Give me that crayon.  You, go sit in the corner.  The rest of the children would look to their teacher with the hopes that he would intervene.  But intervention is against the teacher’s philosophy.  So the dominant child continues to assert control over the rest of the class.  The other children eventually become completely disenfranchised and give up hope that their teacher will ever have their best interests in mind.  Meanwhile, no children would become educated and instead exist only to serve every whim and fancy of the dominant child.

It should go without saying that this teacher should be fired and have their teaching license revoked.

So, if we wouldn’t allow it in a kindergarten classroom – why would we allow it in our national/global economy?  Have we really become so brainwashed by the cult of capitalism?

If you know the story of Greenspan, you know that he resigned from his post at the Federal Reserve just as our economy collapsed.  Shortly thereafter he appeared before a congressional committee.  He testified that his philosophy of deregulation had a fatal flaw inherent within:  It took no account for human weakness.  So the greediness of Wall Street was allowed to run its course, eventually self-destructing as all evil is apt to do.

Here are Greenspan’s own words in response to Rep. Henry Waxman’s question “Were you wrong?”:  “Yes.  I found a flaw and I’ve been very distressed by that fact…A flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak…I’d been going for 40 years or more with very considerable evidence that it was working exceptionally well.”


Of course, we should be able to extend Greenspan some significant grace.  He truly believed that he was acting in the best interest of the national/global economy.  And it takes a big man to admit that he was wrong.

Unfortunately the damage has been done, and I believe it to be in all of our best interest to revolt against the notion that an economy (simply a reflection of human behavior) can be allowed to go unregulated.  We all need each other to hold one another accountable.  We must begin to hold each other to a higher standard, otherwise we will have a continuation of business-as-usual which could very well bring an end to our planet’s life-giving capacity.

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