Brad Aisa

Intervention is Incomprehensible

27 posts in this topic

I don't understand all the intricacies of the position of Fed Chairman and the scope of power it carries, but the thought I keep coming back to is, "Here is a man who had the benefit of a close relationship with Ayn Rand and her ideas. He would have seen in detail and breadth the advantages of putting rational ideas into action and the catastrophe of treating them pragmatically. He was a purported free market advocate and defended the gold standard. He had all that going for him, and a supposedly keen mind, too. And yet, in office, he is known for speaking cryptically, deriding booming investment in a booming economy as "irrational exuberance", playing the same monetarist games as every other Fed Chairman, and most importanly, to me at least, failing entirely to speak out in favor of and use his limited power to push for a separation of state and economy."

What's his excuse?

Why does he need an excuse?

First, he was never fully aboard with Objectivism, something that can be an honest error, even when the person in question is brilliant and is exposed to the best arguments from the most insightful Objectivists.

Second, how do we know that he could push for greater separation between Gov and economy without jeopardizing the changes Reagan was already trying to implement?

I've heard the argument that his hands were tied and that all he could do was stave off total monetary collapse as much as possible. And that he had to walk on eggshells with whatever he said, or risk losing his job which was so critical to our holding down inflation.

You write as if this isn't possible.

That he had to smuggle the free market into the Fed so that Washington wouldn't notice.

I'd say that he had to be careful not to push too hard. Remember where he and Reagan started. It's not true that one can and ought to change things in an instant.

I just don't buy it.

Do you know the man? Can you draw such a conclusion without understanding "all the intricacies of the position of Fed Chairman and the scope of power it carries"?

I don't accept the underlying premise whenever Greenspan is taken apart in this way, namely, that far more was possible and he didn't go for it. Even if he knew better, questionable, given his reluctance to accept Objectivism, we still need to show that DC would've allowed it and that the People would've gone along with it.

I don't see that he did any amount of good that makes him stand out among other Fed Chairmen

He held that position for an incredibly long period of relative prosperity and growth. That's a big deal.

If he had a small amount of direct power and influence, how did he use it for good?

It's been said repeatedly that his biggest contribution was the ability to walk around the DC cocktail circuit and kill horrific ideas and proposals before they had a chance to grow into obstacles. That's a huge and vital contribution given the culture and the power of today's Gov.

Now that he's out of power, where is this passionate champion of laissez-faire capitalism?

That one is tougher, if not impossible to answer.

I think the best thing we can say is that he still has influence, that those that he still influences are no more pro-Capitalism now than they were when he was in power and so pro-Capitalism arguments would fall on deaf ears. There is such a thing as having massive influence only in one way.

And if he didn't have any power, why play the game?

You'd have to ask him.

And there are perfectly valid reasons to get onboard at a time when the nation is about to change direction after the disasters of the late '60s and '70s

I think a moral man would say, "This whole system is rotten and to hell with it -- I'm outta here!"

Leaving the Horrible to do as they would, unimpeded?

The fact is we need people to play the system for time. Some of us may think it's hopeless or that a collapse now would be better than the collapse that may come later, but there's no guarantee that the nation would learn anything by people like Greenspan letting things play out. If anything, a massive collapse may lead to even more controls and statism, stalling us indefinitely.

And who said the man was moral by Objectivist standards?

Consider the Greenspan quote Tara Smith offers in The Menace of Pragmatism, an essay in the current issue of The Objective Standard:

compromise on public issues is the price of civilization.

(Have I mentioned that The Objective Standard is now available at Barnes&Noble? :))

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The fact is we need people to play the system for time. Some of us may think it's hopeless or that a collapse now would be better than the collapse that may come later, but there's no guarantee that the nation would learn anything by people like Greenspan letting things play out. If anything, a massive collapse may lead to even more controls and statism, stalling us indefinitely.

So you just kind of invented this alleged fundamental "need"??? Based on what principles???

Here is a *reasonable* principle: The only legitimate purpose for taking a completely illegitimate job, is supervising its elimination. So in the case of the Fed (or any other similar illegitimate government agency) this means that the only context in which it would be moral or practical (can there even be a dichotomy in a reality-based rational philosophy???) to take the job of chairman, would be to exercise a mandate to dismantle the organization, in a responsible manner.

Government agencies could be classified in the following sets:

1. legitimate (ex. the police)

2. proper per se, but not for government (ex. all the welfare agencies)

3. illegitimate, needing little to no shutdown (ex. Anti-trust branch of Dept of Justice)

4. illegitimate, needing shutdown (ex. Fed, IRS)

Rand indicated it is moral to take jobs in #2 in a mixed economy, especially if the government has largely monopolized the field. However, I would say that it would probably be impractical to choose a career in a completely government monopolized field, since it then sets up a kind of conflict-of-interest, especially as one moves up. There is no justification for taking jobs in #3, since the agency should not exist, performs an immoral function, and has no need really of being shut down, apart from laying everyone off and ceasing operation. #4 should never be done, except in context of shutting down. There is no *rational* way to run a centralized/socialized money supply. There is literally nothing a rational person can do to help, except sanction and give moral credence to the agency. If you don't understand the importance of moral sanction in human affairs, I suggest you look at the lengths every dictatorship goes to make it seem like the poor slave population actually loves the system and its leader. In Saddam's Iraq, a picture of the Glorious Leader was de rigeur in every place, public and private. Agencies like the Fed etc. only persist due to the moral sanction they are given by the populace and by the persons of some stature that run them. The fact that *someone* will run it is no excuse for a moral person to do so.

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