RoR: Forum

At www.dailyreckoning.com they refer to Greenspan as Alan "Bubbles" Greenspan. He has been responsible for the largest credit boom in US history. He has caused the largest stock market bubble in US history (with valuations still at "nose bleed" levels) and the largest property bubble as well. Much of the US current prosperity is due to a massive build up of private and public debt that America will never be able to repay.

Post 1

Wednesday, September 8, 2004 - 9:23pm

Joe, you asked about Alan Greenspan, "Does he really think he's doing a necessary job? Or is he filling the role so someone worse doesn't do damage? There's endless speculation on the matter".

When Greenspan first went to Washington in 1974 as economic advisor to President Ford, it was with very mixed feelings. He loved the work he was doing, and did not relish working in the government; but he believed, and Ayn Rand agreed enthusiastically, that he could make a difference in Washington and, that being so, that he should not miss the opportunity.

That's why he originally went to Washington, and that's why he is still there. And none of us fully can know how much of a difference he's made behind the scenes; and, as yet, he isn't saying.

Barbara

Post 2

Thursday, September 9, 2004 - 11:33am

Albert said: "He has caused the largest stock market bubble in US history (with valuations still at "nose bleed" levels) and the largest property bubble as well. "

Tim: To be fair, he never told people what to pay for stocks and property, only what to pay for debt. People are free to lend/borrow and will take the consequences of those decisions. The government and central banks will determine, however, whether the prudent among us share in the negative consequences of the "irrationally exuberant"

Post 3

Thursday, September 9, 2004 - 1:57pm

I find it hard to believe AR would have approved what Alan G. ended up doing in the position, since in �The Question of Scholarships� she stated the principle that one should not accept the kind of government job that no one should be doing. And surely she believed there ought not to be a Fed. So the only actions she would have approved, to my thinking, would be ones tending to make the Fed obsolete. Surely not the wholesale manipulation of the economy that to all appearances AG enthusiastically embraces.

Post 4

Thursday, June 2, 2005 - 11:15pm

I always thought Greenspan was what might have resulted if Galt, being tortured by the bad guys until he agreed to run the economy, had said "Oh...all right, fine. Get me the latest stats."

Post 5

Thursday, June 2, 2005 - 11:26pm

"To be fair, he never told people what to pay for stocks and property, only what to pay for debt. People are free to lend/borrow and will take the consequences of those decisions."

This isn't a fair take on Austrian analysis of the business cycle, which argues that during a boom or bubble people often make bad investments as a result of the misinformation about economic prospects created by inflationary distortions of the economy. Even if you're looking for inflation--and often businessmen do factor expecation of inflation into their plans--it's not always a slam dunk to know how much of what you're looking at is robust profit opportunity arising from un-chivvied demand and how much is "bubble" about to collapse. Has Greenspan had a role in enabling too-easy credit--in fueling the "irrational exuberance" he then decried--or not? That's the issue.

(Edited by David M. Brown on 6/02, 11:28pm)

Post 6

Friday, June 3, 2005 - 10:41pm

> I always thought Greenspan was what might have resulted if Galt, being tortured by the bad guys until he agreed to run the economy, had said "Oh...all right, fine. Get me the latest stats."

David, underneath the sarcasm you seem to be making the typical Objectivist cheap shot on Alan Greenspan, which comes down to the following:

"He's doing a job (central banker) which wouldn't exist in a free society. Therefore he's sold out, has abandoned Objectivism, etc. Therefore he is immoral, doesn't care about principles, etc."

Problem with this psychologizing is that we don't yet live in a free society. And it is a legitimate function to try to keep the economic ship from sinking until then (runaway inflation, depression, etc.) Whether all of his policies are wise is an entirely separate...and lesser issue...and if you are not an economic expert, you may not be qualified to pontificate on it with great certainty.

Here's an idea for you:

Let's try to assume the best regarding the actions and motives of public figures until we have proof to the contrary.

--Philip Coates

(Edited by Philip Coates
on 6/03, 10:43pm)

(Edited by Philip Coates
on 6/03, 10:47pm)

Post 7

Friday, June 3, 2005 - 11:27pm

I like Alan Greenspan. He's a class act.

Post 8

Saturday, June 4, 2005 - 12:57am

Phil Coates:

"Let's try to assume the best regarding the actions and motives of public figures until we have proof to the contrary."

This is an absurdity. I am to hire a servant, give him the task of protecting my rights and adjudicating such disputes as I may have with my neighbors. I am to grant this servant the power to search my own home and vehicle and to lock me in a cage if he determines that I have violated the rules he lays down for my conduct. I am to grant him a monopoly on the legitimate use of force on all my property. And then I am to "assume the best" regarding his actions and motives? I am not to scrutinize him closely and watch his every move, ever vigilant for evidence of misuse of his awesome power?

Poppycock!

JR

Post 9

Saturday, June 4, 2005 - 1:14am

"[...] Alan Greenspan says he thinks credit expansion is a good thing, particularly praising mortgage loans and installment loans. I am sure everyone else is as surprised as I am. Maybe that explains why he has for years held real short-term interest rates at negative levels."

from http://blog.mises.org/blog/archives/003444.asp

Post 10

Saturday, June 4, 2005 - 1:25am

"Government is not reason; it is not eloquence. It is force. Like fire it is a fearful servant and a terrible master." -George Washington

Light a fire and then "assume the best" about its future actions.

Sheesh!

JR

Post 11

Saturday, June 4, 2005 - 9:08am

JR, you aren't assuming the best. Uh, what is the best?

--Brant

Post 12

Sunday, June 5, 2005 - 12:44pm