Alan Greenspan isn’t a capitalist but he plays one in the media
Every time Alan Greenspan opens his mouth to blame some aspect of the financial crisis on free markets, rather than government intervention, many commentators gleefully proclaim it another nail in the coffin for laissez-faire capitalism. Even Alan Greenspan, the refrain goes, acolyte of Ayn Rand, lover of laissez-faire, admits that the current crisis was a failure of his free-market philosophy.
But Greenspan has no free-market philosophy. As Yaron Brook and I explained in “The Maestro vs. the Market,”
Greenspan, while once associated with laissez-faire philosopher Ayn Rand, hasn’t advocated genuinely free markets for decades. Remember, this is a man who for two decades reveled in being, as the New York Times put it, “the infallible maestro of the financial system.”…. Early in Greenspan’s tenure, some expected the onetime opponent of the Fed and supporter of a gold standard to minimize the Fed’s distortion of markets. Instead, Greenspan became our Manipulator-in-Chief, repeatedly inflating the money supply and artificially lowering interest rates to allegedly magnify prosperity…. Thus, when Greenspan speaks, he does so not as the voice of a (non-existent) free market in finance and housing, but as the voice of government central-planning–a voice with every incentive to blame the market rather than the Fed’s market-distorting policies.
Which brings us to Greenspan’s latest salvo against the free market — a call for government to break up institutions classified as “too big to fail.” According to a Bloomberg news story:
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