Author Topic: Ayn Rand Would Be So Proud Of Where We Are Today  (Read 4368 times)

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Brassmask

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Ayn Rand Would Be So Proud Of Where We Are Today
« on: October 24, 2008, 01:51:55 PM »
Greenspan Follies: The World Is as Ayn Rand Would Have Predicted
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By Dean Baker - October 23, 2008, 6:52PM

Alan Greenspan has finally acknowledged that he may have made some mistakes in allowing an $8 trillion housing bubble to grow unchecked. (Look for rivers flowing upstream.)

This modest act of contrition should be welcomed, but analysts have been far too quick to describe Greenspan as a prisoner of his free market ideology and the current crisis as a story of the free market running wild. This is far too generous a description of Greenspan and the current economic situation.

First, insofar as Greenspan acted (or didn't act) out of ignorance of the true situation, it was because he was ignoring Ayn Rand, not because he was following her.

Let's set the stage. Bear Stearns, Goldman Sachs, Citigroup and the rest of the big banks are run by hotshot Ivy League business school types. These are bright, hard working ambitious people who want to make lots and lots of money.

The executives at these banks are sitting on enormous piles of money that they can get access to as a result of being at these huge banks. The hotshot executives know that they can get huge bonuses by taking risky gambles with the banks' money.

The executives can make bets, that if they pay off, will get them tens of millions a year in bonuses and other compensation. Of course, if they lose they can bring down the house, meaning that they bankrupt Bear Stearns, Lehman, etc.

What would Ayn Rand expect to happen? On the one hand we have the hot shot executives, on the other hand the schmucks who own stock in these banks. Would Ayn Rand expect that the executives would put aside their ambition, their lust for success, their greed, in order to benefit shareholders who are too dumb to even know what a credit default swap is?

Not for a second; Ayn Rand would watch the Wall Street big boys run roughshod over their shareholders' interests and be applauding them every step of the way. That is how the game is played. If Greenspan didn't think the Wall Street crew would rip off their shareholders for every last penny, then he was not a worthy disciple of Ayn Rand.

As far as this being a story of the market having run amok, that is only partially true. The banks were able to get access to vast amounts of capital because everyone had faith in the "too big to fail" doctrine. In other words, all the people who lent Bear Stearns, Lehman, AIG, Goldman and the rest money felt secure because they thought the government would come to the rescue at the end of the day if the hotshots messed up big time.

With the exception of Lehman Brothers, these folks were right. The Wall Street hotshots were gambling not only with their shareholders' money, but they could also count on the security blanket of a government bailout if they really got into trouble. In other words, they were gambling with the taxpayers' money also.

This is important because the Wall Street hotshots didn't have and don't want a free market. They want to be able to take big risks with other people's money, both their shareholders and the taxpayers.

This is not to say that we would want a real free market in finance. It's not even clear what that would look like. But it is clear that the Wall Street hotshots who brought us this disaster have no interest in a free market. They want to be able to operate with a government security blanket while not being required to contain risk or pay for this insurance. Calling them, or their patron Alan Greenspan, free market ideologues is far too generous.

http://tpmcafe.talkingpointsmemo.com/2008/10/23/greenspan_follies_the_world_is/#more


BT

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #1 on: October 24, 2008, 02:20:50 PM »
I guess the larger question would be:

What would Rands position be on the too big to fail doctrine?

My guess is she would be against a government bailout even if it meant the poor schlubs in flyover country starved.


Universe Prince

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #2 on: October 24, 2008, 02:51:02 PM »
Quote

First, insofar as Greenspan acted (or didn't act) out of ignorance of the true situation, it was because he was ignoring Ayn Rand, not because he was following her.


Ignoring Ayn Rand. Hm. I never knew Rand personally, but what I know of her, she doesn't seem like someone who would have been proud of policy that ignored her teachings.

Quote

With the exception of Lehman Brothers, these folks were right. The Wall Street hotshots were gambling not only with their shareholders' money, but they could also count on the security blanket of a government bailout if they really got into trouble. In other words, they were gambling with the taxpayers' money also.

This is important because the Wall Street hotshots didn't have and don't want a free market. They want to be able to take big risks with other people's money, both their shareholders and the taxpayers.


This is perhaps the key part of the column/blog post/whatever it is. We don't have and the corporations do not want a free market. The author is exactly correct on this. And I'm pretty sure Rand wouldn't have been proud of that either.

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Ayn Rand Would Be So Proud Of Where We Are Today


Wow. You seem to have missed the point. By a mile. Now if I had put that subject line on this thread, I'd have meant it as severe sarcasm because I think Rand was right about some things and would be spinning in her grave over this mess. But I'm pretty sure you, Brass, don't agree with Rand about much of anything, so, I think you missed the point of the piece.
Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever.
--Hieronymus Karl Frederick Baron von Munchausen ("The Adventures of Baron Munchausen" [1988])--

Xavier_Onassis

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #3 on: October 24, 2008, 07:22:38 PM »
Rand was not really very knowlegeable about how markets worked in reality. In her world, no capitalist would ever try to corner a market, he would only try to build a better product. A Randian Bill Gates would not think of joining Internet Explorer or any MS music player to Windows. A Randian Jobs would never imagine digital rights management. They would sooner resort to self-castration.

"Time flies like an arrow; fruit flies like a banana."

Universe Prince

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #4 on: October 25, 2008, 01:46:41 AM »

Rand was not really very knowlegeable about how markets worked in reality. In her world, no capitalist would ever try to corner a market, he would only try to build a better product. A Randian Bill Gates would not think of joining Internet Explorer or any MS music player to Windows. A Randian Jobs would never imagine digital rights management. They would sooner resort to self-castration.


Granted I have not read Rand's more direct tomes on her philosophy, but I what I have read in The Fountainhead and Atlas Shrugged does not indicate to me that she thought any of what you just described. Upon what, I must therefore ask, do you base your pronouncement?

And by the way, Steve Jobs did not create digital rights management.
Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever.
--Hieronymus Karl Frederick Baron von Munchausen ("The Adventures of Baron Munchausen" [1988])--

Xavier_Onassis

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #5 on: October 25, 2008, 10:47:23 AM »
Granted I have not read Rand's more direct tomes on her philosophy, but I what I have read in The Fountainhead and Atlas Shrugged does not indicate to me that she thought any of what you just described. Upon what, I must therefore ask, do you base your pronouncement?

And by the way, Steve Jobs did not create digital rights management.

============================
Whomever thought up DRM was hardly a Randian. Of course, the computer industry did not exist, nor did anything similar to it exist in Rand's times. But her belief was that self-esteem would prevent any capitalist from trying to unfairly monopolize a market. She hated anyone who presumed to practice altruism, but stealing ideas was strictly so immoral that no self-respecting captain of industry could conceivable be guilty of such theft.

Her first contact with US capitalism was as an extra, then a set designer and scriptwriter in the movie industry of the 1930's and '40's. She apparently could not have been noticing that the theft of ideas and monopolization were the essence of Hollywood, though she did write the novel of the Fountainhead and the screenplay as well. The Director was King Vidor, of all people.

It seems that her solution was to split from Hollywood, where her husband had a great job supplying flowers and plants to the film industry to New York, where he had difficulty getting a job in a florist's shop. Then she cuckolded him most shamelessly.

If she was a philosophical genius, as a human being she was a jerk.

There was Rand the ideologue, and Rand the totally inconsiderate egomaniac. The latter claimed to be a representation of the former.



"Time flies like an arrow; fruit flies like a banana."

Universe Prince

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #6 on: October 25, 2008, 11:20:59 PM »

But her belief was that self-esteem would prevent any capitalist from trying to unfairly monopolize a market.


Again, what makes you think so?


If she was a philosophical genius, as a human being she was a jerk.


You'll get no argument from me there.
Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever.
--Hieronymus Karl Frederick Baron von Munchausen ("The Adventures of Baron Munchausen" [1988])--

Xavier_Onassis

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #7 on: October 26, 2008, 12:15:19 AM »
But her belief was that self-esteem would prevent any capitalist from trying to unfairly monopolize a market.


Again, what makes you think so?

================================
I don;t think so, but she did, That's what she claimed.
"Time flies like an arrow; fruit flies like a banana."

Xavier_Onassis

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #8 on: October 26, 2008, 12:17:52 AM »
I don't think Greenspan was following Rand or ignoring her.  He was a whole lot better versed in the reality of the economic system than she was. His understanding was not perfect, but it was better than Rand's and a lot of others as well.
"Time flies like an arrow; fruit flies like a banana."

Plane

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #9 on: October 26, 2008, 01:51:14 AM »
I don't think Greenspan was following Rand or ignoring her.  He was a whole lot better versed in the reality of the economic system than she was. His understanding was not perfect, but it was better than Rand's and a lot of others as well.

Wasn't one of the villans in the fountainhead a captain of the real estate market?

Xavier_Onassis

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #10 on: October 26, 2008, 10:26:52 AM »
Wasn't one of the villans in the fountainhead a captain of the real estate market?

I think this is true, some guy who was building housing for the poor or something. The hero was an architect, and when he did not like what they did to his building, he blew it up.

So there Rand was apparently in favor of terrorism, I suppose. At least on paper.
"Time flies like an arrow; fruit flies like a banana."

Universe Prince

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #11 on: October 26, 2008, 11:24:39 AM »

But her belief was that self-esteem would prevent any capitalist from trying to unfairly monopolize a market.


Again, what makes you think so?

================================
I don;t think so, but she did, That's what she claimed.


Sigh. Where did she claim this?


I don't think Greenspan was following Rand or ignoring her.


Neither following nor not following. Is this a koan?


The hero was an architect, and when he did not like what they did to his building, he blew it up.

So there Rand was apparently in favor of terrorism, I suppose. At least on paper.


While one could make the argument Rand was okay with terrorism, that isn't one of the things that would support the argument. The building was not blown up with intent to kill or cause fear, so it would not be a sign Rand supported terrorism.
Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever.
--Hieronymus Karl Frederick Baron von Munchausen ("The Adventures of Baron Munchausen" [1988])--

Xavier_Onassis

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #12 on: October 26, 2008, 11:30:18 AM »
I suggest that blowing up a building for whatever reason is a form of terrorism. Those who took Rand's hero off the project were terrorized from rebuilding it.

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The idea that good capitalists would refrain from limiting competition and such runs thoughout all her later books. Just read one.

Napoleon used neither a Gillette or a Norelco. He ate neither Campbell's nor Progresso soups. That does not constitute a koan. Rand did not discuss in any of her books how she felt the Fed should be run, so Greenspan was neither following nor not following.
"Time flies like an arrow; fruit flies like a banana."

Universe Prince

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #13 on: October 26, 2008, 12:05:08 PM »

I suggest that blowing up a building for whatever reason is a form of terrorism.


There is so much that is foolish about that statement, I don't think I need to point it out.


Those who took Rand's hero off the project were terrorized from rebuilding it.


Terrorized? You're reaching.


The idea that good capitalists would refrain from limiting competition and such runs thoughout all her later books. Just read one.


I've read two, and I don't recall Rand suggesting such a thing.


Napoleon used neither a Gillette or a Norelco. He ate neither Campbell's nor Progresso soups. That does not constitute a koan. Rand did not discuss in any of her books how she felt the Fed should be run, so Greenspan was neither following nor not following.


That comparison doesn't even make sense. Rand's teachings were not products that came into being after Greenspan died. And she did speak extensively about economics, which is what Greenspan's job as chairman of the Federal Reserve dealt with, so yes, Greenspan was in fact either following or not following.
Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever.
--Hieronymus Karl Frederick Baron von Munchausen ("The Adventures of Baron Munchausen" [1988])--

BT

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Re: Ayn Rand Would Be So Proud Of Where We Are Today
« Reply #14 on: October 26, 2008, 12:41:29 PM »
Quote
I suggest that blowing up a building for whatever reason is a form of terrorism. Those who took Rand's hero off the project were terrorized from rebuilding it.

So much for your defense of Ayers.