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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Alan Greenspan on global capitalism « Previous | |Next »
September 16, 2007

Alan Greenspan, the former Chairman of the Federal Reserve and darling of the Masters of the Universe on Wall Street, has written a memoir entitled The Age of Turbulence: Adventures in a New World. His perspective is that of a libertarian Republican who believes in fiscally conservative government and free markets, and so he looks favourably on world of a global capitalist--he admires the flexibility, openness resilience, self-directing, and fast-changing. His capitalism is no wrecking ball.

Some comments and quotes from Greenspan's text are found in Bob Woodward's review in the Washington Post. Woodward says that Greenspan has nothing but praise for hedge funds, which he describes as:

"a vibrant trillion-dollar industry dominated by U.S. firms." He claims that hedge funds help eliminate inefficiency in the markets. "They are essentially free of government regulation, and I hope they will remain so." He scoffs at proposals to regulate them, declaring, "Why do we wish to inhibit the pollinating bees of Wall Street?"

Why indeed. Isn't it interesting how the free market crowd think of globalism capitalism in terms of nature. I guess it's designed to stop any contestation of the claims being made.

Woodward saysthat Greenspan argues that an advanced economy hinges on property rights, the rule of law, a culture of trust, contracts, debt, reputation, self-interest and "creative destruction" -- the scrapping of old technologies and processes:

He argues, for example, that the loss of manufacturing jobs in the United States -- from the steel, automobile and textile industries to computers and telecommunications -- "is a plus, not a minus, to the American standard of living." He maintains that immigration reform, "by opening up the United States to the world's very large and growing pool of skilled workers," will help reduce the inequality of incomes.

At least Greenspan has the honesty to acknowledge that the Bush and Cheney conservatives had little to do with advancing the ideals of effective, fiscally conservative government and free markets. He says that little value was placed on rigorous economic policy debate or the weighing of long-term consequences, and they veered off in the opposite direction, down the pathway to dysfunctional governance. His judgement is that the Bush administration swapped principle for power and ended up with neither.

Greenspan's legacy is one of the housing bubble and bust, that was fueled by low interest rates and risky sub-prime mortgages in the last six years. That's another process of eliminating inefficiency in the market I guess. Or maybe the housing bubble can be blamed on the fall of communism?

| Posted by Gary Sauer-Thompson at 9:17 AM | | Comments (1)


The Age is carrying a report that Alan Greenspan, the former federal Reserve chairman, says in his memoir that theUS went to war in Iraq motivated largely by oil:

am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil

That lets the cat out of the bag doesn't it.