I recently posted an interview I did with the ghost of Ayn Rand and, as expected, a few Randian ideologues came out of the woodwork to challenge the points I sought to get across in my post.
I do these faux-interviews because I believe that my strong suit as a writer and financial commentator is satire, in the grand tradition of Jonathan Swift and The Simpsons. The point I was making was that markets, even free ones, do require a modicum of regulation, and that the events of 2008 categorically proved that the emperors, in fact, have no clothes.
Here is my rather interesting exchange in the comments section with a gentleman who goes by the name of C. Jeffrey Small. He clearly knows his stuff and I thought he made several good points, but I stick to my guns as far as my overall premise.
My retorts are in bold:
“For starters, one of the most enduring aspects of your philosophy was that the smartest, most capable citizens should be absolutely free from any government or regulatory interference in order for the society as a whole to move forward. Well, that experiment has been carried out in the US over the last decade or so and it almost led to the end of the world. Any thoughts on where you may have been wrong?”
Is it possible that you actually believe that an experiment in individual and economic freedom was conducted over the last decade, or is this just some form of ironic word play at the reader’s expense? If the former, and you truly think that the Bush years were a model of Capitalism and an administration that truly promoted individual rights as outlined in the US Constitution, then there isn’t anything that I or anyone else could say that could get through to you.
TRB: To my knowledge, no president has ever truly offered “model of Capitalism and an administration that truly promoted individual rights as outlined in the US Constitution” in its purest sense, but I gotta tell you sir, the last 10 to 12 years were as close to a free-for-all as you’re going to get in terms of lax restriction and the elites were given just enough rope to hang themselves. Everything they were in charge of fell apart. Don’t believe me? Ask 2 out of the 10 people you know who are unemployed.
I have no reason to doubt that you sincerely believe that the Bush years were a “free-for-all” and represent a period of significant regulatory reduction. This is certainly the picture that the politicians and the press have gone to great lengths to convey. However, nothing could be further from the truth. While some specific regulations were rescinded under Bush, there were many, many more new regulations created to replace them. Overall, businesses were far more constrained by the end of the Bush administration than at the beginning. Bush significantly increased the national debt, and expanded the intrusion of government into an ever increasing number of areas. He supported all of the disastrous actions taken with regards to the FED, FDIC, Fannie Mae, Freddie Mac, etc. which were responsible for the housing bubble and the start of the economic collapse. He supported the trillion dollar FED bailout. And here were many shady public/private business dealings of a quasi-fascist nature. None of this qualifies as anything remotely approaching capitalism.
And now with Obama doing all of these things, only on an unimaginably larger scale, what is there to be proud of? For the life of me, I cannot understand how people get it in their mind that Bush represented capitalism and demonstrated its failure. Just like his father and Clinton, and Carter, before him, Bush was a weenie, inconsistent socialist who didn’t have the guts to go all the way with his policies. But the distance that he and his predecessors did travel has been a continual series of disasters. Now Obama, a proud socialist, stands defiantly in the open and works to fully implement everything that Bush only approached half-heartedly, and if left unchecked, is poised to plunge this country into a true disaster from which, ultimately, we might not be able to recover.
You are correct in saying that no president in the 20th century has promoted true capitalism and our constitutional rights. It is about time that we get one that actually understood these concepts and reigned in government, freeing people to once again rebuild our tattered economy and restore liberty to all.
You seem to be familiar with some of Rand’s works. If you understood anything that you read, then you must know that if she had lived to see it, Rand would have vilified Greenspan as a traitor for taking the job at the FED and would have classified his actions as some of the worst examples of government abuse. Greenspan was the Dr. Stadler in our current sorry cast of characters. Also, how do you account for the fact that the events in Atlas Shrugged, written over 50 years ago, are playing out almost verbatim, today? There must be some fundamental principles in operation that makes that kind of forecasting of the future possible!
As for me, I won’t be taking an opinion poll of my friends, whether employed or unemployed, to determine my conclusions on what is transpiring in the world today. I prefer to look at the facts and integrate them into a picture that can be comprehended and understood in terms of basic principles. And I find time and again that the trouble we find ourselves facing today is easily explained by government meddling in the economy – and not by some non-existent pipe-dream that we tried capitalism and that it was proven a failure.
C. Jeffery Small
TRB: I respect your views and certainly your understanding of Rand’s ideology trumps mine, however, I disagree with your assertion that there was more regulation as opposed to less. I’d like to point out two key pieces of legislation and one non-enforcement of the Fed’s mandate that were proximate causes of the condition we currently find ourselves in. Ironically, all three of these items were high lobbied-for and sought after by he very banks that used them to commit fiscal suicide:
1. The Commodity Futures Modernization Act, pushed for by Enron, which exempted the trillions in CDS contracts that led to our $173 billion ransom payment to AIG and its counterparties
2. The repeal of Glass-Steagal, which led to the Too Big To Fail culture that ended up in the most expensive rescue effort in the history of business
3. The Fed’s apathy in terms of monitoring the banking system as well as the exemption for the Big 5 i-banks (Lehman, Bear, Merrill, Morgan & Goldman) which led to a game of leverage chicken, culminating with 40-to-1 debt to equity ratios and a speculative orgy.
All three of these rule changes (eases) would have been cheered on by the objectivists as being concrete steps toward the ultimate goal of the absolute freedom for markets.
I thought I held my own, although I am admittedly something of a dilettante in matters of philosophy.
Thanks for the debate, Jeffrey, you’re welcome back to add your own two cents below.