Culture wars over the economic crisis
You’ve no doubt heard the whole litany: Alan Greenspan stuffed up. Alan Greenspan admitted “a flaw” in his hands-off ideology. Alan learned his chops from his friend Ayn Rand. So that means Rand’s Objectivism has failed.
I don’t know about you, but I keep hearing this all the time. “What makes it especially revolting,” says Harry Binswanger, longtime friend of Rand (who died in 1982), “is that the real destroyer of the economy is Greenspan, through his inflation-generating last years at the Fed.”
Commentators from Gareth Morgan to Harry Binswanger to Roger Kerr to George Reisman to the contributors at the Mises Institute have pointed this out, but for the most part haven’t been heard. They’ve cogently, responsibly and thoroughly destroyed the myth of free-market failure, pointing out the role and responsibility of Greenspan and his central bankers for the present crash (whose seeds were set in Greenspan’s massive credit expansion from 2001 to 2004), and for all the earlier crashes over which they presided. The priority of Alan Greenspan’s Fed in particular, notes Morgan, has become to keep economic growth going by the continual expansion of credit. “So much so that the periodic creative destruction that markets naturally undertake to prevent excesses, was no longer considered necessary. Oh dear.”
But for the most part, the mainstream media isn’t really listening. The real story doesn't fit their pro-big-government playbook.
Now, however, Newsweek magazine has put the question to the Ayn Rand Institute’s Yaron Brook. His response?
This is not a failure of free markets, this is not a failure of capitalism, but this is a failure of the exact opposite. It's a failure of the regulatory state. It's a failure of all the government policies of the last eight years. Actually, the last 95 years.
Why do you say the last 95 years?
I believe that the No. 1 cause of the current crisis is Federal Reserve policy. [The Federal Reserve was created in 1913.] The Federal Reserve, by necessity, creates economic problems; no matter how good a Federal Reserve chairman is, he's going to create cycles of booms and busts.
It’s a great (if short) interview. You should read it.
And Britain’s Telegraph carries this blog from Ayn Rand Institute’s Alex Epstein: “What capitalists need to understand,” penned in response to Iain Martin's observation in the Telegraph that "A culture war has been launched against free markets and so far the hostilities have been astonishingly one-sided." This “unfortunately applies just as much to America as to Britain,” says Epstein (as it does here).
Good question – and he has the answer. Find out what capitalists need to understand to make them more vocal in defence of their values. What they need to know above all is this:
Today's crisis illustrates the evils of government intervention in the economy and vindicates supporters of laissez-faire capitalism… Today's events are not unexpected consequences of laissez-faire that Rand, Ludwig von Mises, and others failed to anticipate--they are expected consequences of the mixed economy that they explained decades ago.
The ‘other’ side isn’t silent, and they’re wrong. So why should we be so silent when, unlike them, we have reality on our side.