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Sunday, May 10, 2009

I Think I Just Heard John Galt Fart: How the Ex Fed Chairman Finally Learned That There’s Greed on Wall Street

According to a May 6 report by Kat Aaron of the Center for Public Integrity, the aftermath of the subprime mortgage crisis and the ensuing global economic meltdown have left former Federal Reserve Board Chairman Allan Greenspan utterly dumbfounded by the failure of lenders and investment firms to act on their own to prevent the crisis.

"Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity, myself especially, are in a state of shocked disbelief,” said Greenspan (as quoted by Aaron) in his October 2008 testimony before the House Committee on Oversight and Government Reform.

So there’s greed and irresponsibility in the financial industry? Really? Who’d have thunk?

Duh. I’m sure, Mr. Greenspan, that even my seven-year-old child could have told you that.

It’s not my intention to pick on the financial industry here, or to suggest that subprime lenders or investment bankers are inherently any more greedy than anyone else. They’re simply imperfect human beings who, like you and I, need some basic rules to keep their human weaknesses from getting the best of them.

So it seems that “the virtue of selfishness” may not be so virtuous after all. And maybe now that Ayn Rand has gone on to her reward, her protégé, Maestro Greenspan, may finally, this late in his life, get a healthy dose of the reality that those of us who choose to make our careers in private business are not inherently any more virtuous than any other human beings. We are just as prone to the human pitfalls of greed, self deception, arrogance, corruptibility, and even irrational exuberance as are, for example, all those dreaded government bureaucrats that Rand and her followers despised so much.

Self-regulation of industry is a naïve and misguided concept for the simple reason that human beings, due to their imperfect nature, need checks and balances. We can’t have business without rules any more than we can have streets without stop signs and traffic lights, football games without officials, or Scrabble without a dictionary.

This seems so obvious, really, that it’s difficult not to question the underlying motives of those who would argue otherwise. Sphere: Related Content

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