When historians want to mark the moment the hyper-libertarian economic philosophy died in America, they might take this morning’s appearance by Ayn Rand’s disciple, Alan Greenspan before the House Oversight Committee.
Mr. Greenspan said he had made a “mistake” in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions. Mr. Greenspan said that he had found “a flaw in the model that I perceived is the critical functioning structure that defines how the world works.”
Mr. Greenspan, who headed the nation’s central bank for 18.5 years, said that he and others who believed lending institutions would do a good job of protecting their shareholders are in a “state of shocked disbelief.”
It is perhaps a marker of how far we have traveled in five weeks that when I proclaimed the end of the Uber-Libertarian on September 12, there was still a lot of push back from the community. For the leader of the libertarian philosophy to now proclaim he was wrong, seems to be the nail in that coffin. As Jacob Weisberg points out, libertarians have an excuse for every failing of the last few years, but they all ring false.
Utopians of the right, libertarians are just as convinced that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along.
To which the rest of us can only respond, Haven’t you people done enough harm already? We have narrowly avoided a global depression and are mercifully pointed toward merely the worst recession in a long while. This is thanks to a global economic meltdown made possible by libertarian ideas.