Robert Kuttner , author of "The Squandering of America: How Our Politics Undermines Our Prosperity", is convinced we are heading for a recession.
"The recent subprime mortgage collapse, and the hedgefunds that have contributed to the somewhat volatile stock market we see today have one thing in common. They have exploited loopholes in what remains of federal regulation."
Many Americans probably assume subprime lenders are put in business by some sleazy establishment, when the truth is, it's the bluest chip names on Wall Street including Citigroup, who can take credit for empowering this group. It's not the individual corruption that is the root cause of the numerous scandals, and the subprime fiasco we see today. Individual corruption is only the
result of too much temptation created by the gradual process of deregulating the American economy that started in the 1960s and really took off once Alan Greenspan's "cheap money" policy and Ronald Reagan's "trickle- down" economics combined to create a
"utopia of greed" giving birth to the mirror-image of the 1920s, the 1990s.
"‘Atlas Shrugged’ is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should.” -- Alan Greenspan in 1957 responding to a critic of Atlas Shrugged
Even in an ideal world, where everyone starts out on equal footing, Alan Greenspan's thinking is a little harsh, but considering the inequality and injustice that exist, he is either blind as a bat or ruthless as a rat. Alan Greenspan's strong belief in Laissez-Faire...that the government should not intervene to maintain a desired wealth distribution and that it should not protect people from poverty is steeped in hypocrisy considering he made sure the wealthiest citizens were insulated from the harsh mechanisms of the unfettered market.
"What she (Ayn Rand) did…was to make me think why capitalism is not only efficient and practical, but also moral," -- Alan Greenspan in 1974
Ayn Rand basically gave him the permission to blind himself to the ruthless effect "
Laissez-Faire" could have on the
*"
parasites" he speaks of especially when he does not apply it to those who started life at the finish line...but has no problem reserving this sometimes brutal economic doctrine of opposing governmental regulation in commerce for the many people who cannot even begin to find the starting line.
The bottom line is deregulating our economy entirely, requires the regulation of unbridled greed, which requires reducing temptation in the market place which can only be accomplished through edict. Greed is here to stay because it is hardwired into human beings therefore cannot be eliminated, only regulated.
* In all fairness, Alan Greenspan was only 25-years old when he wrote that piece and should be given the benefit of the doubt. I know I have changed my views considerably since I was 25 and hopefully he has too. However, I do think that type of thinking influenced the decisions he made or neglected to make during the time he was Chairman.
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