Greenie II

September 17th, 2007

More interesting reads regarding Greenspan, Ayn Rand and capitalism.

To save time, I’ll let Joseph Burgess at Green Dog Democrat do the heavy lifting on the economic reads; go to this link for recent articles on the meltdown, including a Krugman. [As I can't get a permanent link on this post, for future reference it will be archived as The Republican economy, September 16, 2007 ]

Jude

Alan Greenspan claims Iraq war was really for oil
Graham Paterson, Times UK
September 16, 2007

AMERICA’s elder statesman of finance, Alan Greenspan, has shaken the White House by declaring that the prime motive for the war in Iraq was oil.

In his long-awaited memoir, to be published tomorrow, Greenspan, a Republican whose 18-year tenure as head of the US Federal Reserve was widely admired, will also deliver a stinging critique of President George W Bush’s economic policies.

However, it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” he says.

Greenspan, 81, is understood to believe that Saddam Hussein posed a threat to the security of oil supplies in the Middle East.

Britain and America have always insisted the war had nothing to do with oil. Bush said the aim was to disarm Iraq of weapons of mass destruction and end Saddam’s support for terrorism. ++

The Visible Hand of the Greenspan
Jerome Doolittle, Smirking Chimp
Sep 16 2007

Fortunately I was too lazy yesterday to do right by Alan Greenspan, the latest rat to blacken the hawsers of Bush’s sinking ship.

Fortunately, because Susie Madrak at Suburban Guerrilla has posted almost everything I planned to say about the veteran free-market regulator of the free market. Almost, because Susie missed a particularly inane specimen of Greenspaniana from an old essay in Ayn Rand’s Objectivist Newsletter:

Regulation, in an unregulated economy, is thus a major competitive tool…Drug manufacturers and food processors vie with one another to make their brand names synonymous with fine quality. Physicians have to be just as scrupulous in judging the quality of the drugs they prescribe…

A company cannot afford to risk its years of investment by letting down its standards of quality for one moment or one inferior product; nor would it be tempted by any potential “quick killing.”

Poor Alan, you must be thinking by this point. Little did the young economic consultant know that the thalidomide tsunami was about to smash his naïveté to bits.

Hold your pity. Greenspan’s youthful brain dropping appeared in August of 1963, well after Washington Post reporter Morton Mintz broke the story of how a brave federal regulator named Dr. Frances Kelsey had singlehandedly protected the United States from the worst horrors of thalidomide.

To be ignorant of this Greenspan would have had to be living on Mars. Evidently he was not. On the very next page of the same fatuous essay he writes:

The guiding purpose of the government regulator is to prevent rather than to create something. He gets no credit if a new miraculous drug is discovered by drug company scientists; he does if he bans thalidomide.

++

The “Cult” of Republicanism: Simplicity as Idol
P.M. Carpenter
Sep 16 2007

OK, Barry, I’ll take your advice and blame it all on you. For as you, Mr. Goldwater, advised during your ill-fated 1964 presidential campaign: “The big trouble with the so-called liberal today is that he doesn’t understand simplicity.”

Problems? No problems, you said, as long as “we have the courage to face them…. Those who don’t have that courage want complicated answers” — a spirit of wholesale anti-intellectualism that prompted NYT columnist Tom Wicker to note that you’re like a “child…, with a child’s directness and lack of complexity.”

From that ‘64 campaign, you, Barry, inadvertently created the New Republican Guard — the New Right — which morphed over the years into the blind, anti-intellectual monsters in control today; those who, in their pursuit of electoral dominance, trashed the electorally inept Old Guard’s cherished principles of small government, balanced budgets and fiscal sanity.

And trash them they did — soundly, solidly, completely — endowing us with a bloated, supply-sided, debt-ridden, ineffective government; ineffective, that is, except for those who don’t need it. The anti-intellectuals would merrily rake in the plutocratic cash to grease their political machine and further indulge the plutocracy, leaving the middle class and poor to fend for themselves. Socialism, as they say, for the rich; capitalism for the rest of us.

As columnist Jonathan Chait observes in a recent New Republic article, “Feast of the Wingnuts”: “American politics has been hijacked by a tiny coterie of right-wing economic extremists, some of them ideological zealots, others merely greedy, a few of them possibly insane. The scope of their triumph is breathtaking. Over the course of the last three decades, they have moved from the right-wing fringe to the commanding heights of the national agenda. Notions that would have been laughed at a generation ago … are now so pervasive, they barely attract any notice.

“The result has been a slow- motion disaster,” writes Chait, availing massive deficits, unsustainable income inequality and big government by business lobbyists.

Meanwhile the anti-intellectual politicos on the right hysterically charge that, for instance, rising income inequality — buttressed by slashes in marginal tax rates and resulting in jumbo deficits which the middle class and poor will inherit — is merely a demagogic fright-mantra of liberalism in its habitual campaigns of class warfare.

But the demagoguery was, and is, all theirs, of course. And now, as the economic chickens come home to roost, some of their then-gleeful co-conspirators are bellowing blame and fingering the real culprits. But only from a safe and sagacious distance.

The latest self-sparing, safety-first co-conspirer to rat out his pals is Alan Greenspan. Monday is the official launch of his delicious memoirs, “The Age of Turbulence: Adventures in a New World,” in which — from that familiar distance — he not only fingers the culprits, he screws them but good.

According to a NYT advance peek, “Greenspan paints a picture of Mr. Bush as a man driven more by ideology” — that would be the ideology of simplicity advanced by Barry Goldwater — “and the desire to fulfill campaign promises made in 2000, incurious about the effects of his economic policy….”

Incurious. The perfect word. For when one possesses an all-encompassing, roundly simplistic ideology that makes intellectual strain a needless exercise, curiosity becomes merely a time-consuming interference with presidential bike rides.

Jonathan Chait’s article delves deeply and insightfully into the origins of what he calls today’s Republican “cult” of ideological economic madness. Some may care to read it. But me? I’ll just take Goldwater’s anti-intellectual advice and simplistically blame it all on him — much as he did himself, after it was too late, and he saw what madness he had wrought. ++

Ayn Rand’s Literature of Capitalism
HARRIET RUBIN, New York Times
September 15, 2007

One of the most influential business books ever written is a 1,200-page novel published 50 years ago, on Oct. 12, 1957. It is still drawing readers; it ranks 388th on Amazon.com’s best-seller list. (”Winning,” by John F. Welch Jr., at a breezy 384 pages, is No. 1,431.)
The book is “Atlas Shrugged,” Ayn Rand’s glorification of the right of individuals to live entirely for their own interest.

For years, Rand’s message was attacked by intellectuals whom her circle labeled “do-gooders,” who argued that individuals should also work in the service of others. Her book was dismissed as an homage to greed. Gore Vidal described its philosophy as “nearly perfect in its immorality.”

But the book attracted a coterie of fans, some of them top corporate executives, who dared not speak of its impact except in private. When they read the book, often as college students, they now say, it gave form and substance to their inchoate thoughts, showing there is no conflict between private ambition and public benefit.

“I know from talking to a lot of Fortune 500 C.E.O.’s that ‘Atlas Shrugged’ has had a significant effect on their business decisions, even if they don’t agree with all of Ayn Rand’s ideas,” said John A. Allison, the chief executive of BB&T, one of the largest banks in the United States.

“It offers something other books don’t: the principles that apply to business and to life in general. I would call it complete,” he said.

One of Rand’s most famous devotees is Alan Greenspan, the former chairman of the Federal Reserve, whose memoir, “The Age of Turbulence,” will be officially released Monday.

Mr. Greenspan met Rand when he was 25 and working as an economic forecaster. She was already renowned as the author of “The Fountainhead,” a novel about an architect true to his principles. Mr. Greenspan had married a member of Rand’s inner circle, known as the Collective, that met every Saturday night in her New York apartment. Rand did not pay much attention to Mr. Greenspan until he began praising drafts of “Atlas,” which she read aloud to her disciples, according to Jeff Britting, the archivist of Ayn Rand’s papers. He was attracted, Mr. Britting said, to “her moral defense of capitalism.”

Rand’s free-market philosophy was hard won. She was born in 1905 in Russia. Her life changed overnight when the Bolsheviks broke into her father’s pharmacy and declared his livelihood the property of the state. She fled the Soviet Union in 1926 and arrived later that year in Hollywood, where she peered through a gate at the set where the director Cecil B. DeMille was filming a silent movie, “King of Kings.”

He offered her a ride to the set, then a job as an extra on the film and later a position as a junior screenwriter. She sold several screenplays and intermittently wrote novels that were commercial failures, until 1943, when fans of “The Fountainhead” began a word-of-mouth campaign that helped sales immensely.

Shortly after “Atlas Shrugged” was published in 1957, Mr. Greenspan wrote a letter to The New York Times to counter a critic’s comment that “the book was written out of hate.”

Mr. Greenspan wrote: ” ‘Atlas Shrugged’ is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should.”

Rand’s magazine, The Objectivist, later published several essays by Mr. Greenspan, including one on the gold standard in 1966.

Rand called “Atlas” a mystery, “not about the murder of man’s body, but about the murder — and rebirth — of man’s spirit.” It begins in a time of recession. To save the economy, the hero, John Galt, calls for a strike against government interference. Factories, farms and shops shut down. Riots break out as food becomes scarce.

Rand said she “set out to show how desperately the world needs prime movers and how viciously it treats them” and to portray “what happens to a world without them.”

The book was released to terrible reviews. Critics faulted its length, its philosophy and its literary ambitions. Both conservatives and liberals were unstinting in disparaging the book; the right saw promotion of godlessness, and the left saw a message of “greed is good.”

Rand is said to have cried every day as the reviews came out.

Rand had a reputation for living for her own interest. She is said to have seduced her most serious reader, Nathaniel Branden, when he was 24 or 25 and she was at least 50. Each was married to someone else. In fact, Mr. Britting confirmed, they called their spouses to a meeting at which the pair announced their intention to make the mentor-protégé relationship a sexual one.

“She wasn’t a nice person, ” said Darla Moore, vice president of the private investment firm Rainwater Inc. “But what a gift she’s given us.”

Ms. Moore, a benefactor of the University of South Carolina, spoke of her debt to Rand in 1998, when the business school at the university was named in Ms. Moore’s honor. “As a woman and a Southerner,” she said, “I thrived on Rand’s message that only quality work counted, not who you are.”

Rand’s idea of “the virtue of selfishness,” Ms. Moore said, “is a harsh phrase for the Buddhist idea that you have to take care of yourself.”

Some business leaders might be unsettled by the idea that the only thing members of the leadership class have in common is their success. James M. Kilts, who led turnarounds at Gillette, Nabisco and Kraft, said he encountered “Atlas” at “a time in college life when everybody was a nihilist, anti-establishment, and a collectivist.” He found her writing reassuring because it made success seem rational.

“Rand believed that there is right and wrong,” he said, “that excellence should be your goal.”

John P. Stack is one business executive who has taken Rand’s ideas to heart. He was chief executive of Springfield Remanufacturing Company, a retooler of tractor engines in Springfield, Mo., when its parent company, International Harvester, divested itself of the firm in the recession of 1982, the year Rand died.

Having lost his sole customer in a struggling Rust Belt city, Mr. Stack says, he took action like a hero out of “Atlas.” He created an “open book” company in which employees were transparently working in their own interest.

Mr. Stack says that he assigned every job a bottom line value and that every salary, including his own, was posted on a company ticker daily. Workplaces, he said, are notoriously undemocratic, emotionally charged and political.

Mr. Stack says his free market replaced all that with rational behavior. A machinist knew exactly what his working hour contributed to the bottom line, and therefore the cost of slacking off. This, Mr. Stack said, was a manifestation of the philosophy of objectivism in “Atlas”: people guided by reason and self-interest.

“There is something in your inner self that Rand draws out,” Mr. Stack said. “You want to be a hero, you want to be right, but by the same token you have to question yourself, though you must not listen to interference thrown at you by the distracters. The lawyers told me not to open the books and share equity.” He said he defied them. ” ‘Atlas’ helped me pursue this idiot dream that became SRC.”

Mr. Stack said he was 19 and working in a factory when a manager gave him a copy of the book. “It’s the best business book I ever read,” he said. “I didn’t do well in school because I was a big dreamer. To get something that tells you to take your dreams seriously, that’s an eye opener.”

Mr. Stack said he gave a copy to his son, Tim Stack, 25, who was so inspired that he went to work for a railroad, just like the novel’s heroine, Dagny Taggart.

Every year, 400,000 copies of Rand’s novels are offered free to Advanced Placement high school programs. They are paid for by the Ayn Rand Institute, whose director, Yaron Brook, said the mission was “to keep Rand alive.”

Last year, bookstores sold 150,000 copies of the book. It continues to hold appeal, even to a younger generation. Mark Cuban, the owner of the Dallas Mavericks, who was born in 1958, and John P. Mackey, the chief executive of Whole Foods, who was 3 when the book was published, have said they consider Rand crucial to their success.

The book’s hero, John Galt, also continues to live on. The subcontractor hired to demolish the former Deutsche Bank building, which was damaged when the World Trade Center towers fell, was the John Galt Corporation. It was removed from the job last month after a fire at the building killed two firefighters.

In Chicago, there is John Galt Solutions, a producer of software for supply chain companies like Tastykake. The founder and chief executive of the company, Annemarie Omrod, said she considered the character an inspiration.

“We were reading the book,” she said, when she and Kai Trepte were thinking of starting the company. “For us, the book symbolized the importance of growing yourself and bettering yourself without hindering other people. John Galt took all the great minds and started a new society.

“Some of our customers don’t know the name, though after they meet us, they want to read the book,” she went on. “Our sales reps have a problem, however. New clients usually ask: ‘Hey, where is John Galt? How come I’m not important enough to rate a visit from John Galt?’ ” ++

“So keep fightin’ for freedom and justice, beloveds, but don’t you forget to have fun doin’ it. Lord, let your laughter ring forth. Be outrageous, ridicule the fraidy-cats, rejoice in all the oddities that freedom can produce. And when you get through kickin’ ass and celebratin’ the sheer joy of a good fight, be sure to tell those who come after how much fun it was.”
~ Molly Ivins, 1944 - 2007

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Entry Filed under: Political Waves