Alan Greenspan memoir

[Aggrad02]

Michael,

I understand what you are saying. I also understand that given more time then a few seconds to answer the question would have probably brought a much better answer.

But to things have led me to believe that Greenspan compromised his values.

1) pg. 52

"I still found the broader philosophy of unfettered market competition compelling, as I do to this day, but I reluctantly began to realize that if there were qualifications to my intellectual edifice, I couldn't argue that others should readily accept it. By the time I joined Richard Nixon's campaign for the presidency in 1968, I had long since decided to engage in efforts to advance free market capitalism as an insider, rather than as a critical pamphleteer. When I agreed to accept the nomination as chairman of the president's Council of Economic Advisors, I knew I would have to pledge to uphold not only the Constitution but also the law of the land, many of which I thought were wrong. The existence of a democratic society governed by the rule of law implies a lack of unanimity on almost every aspect of the public agenda. Compromise on public issues is the price of civilization, not an abrogation of principle."

2) When retiring from the fed:

Ron Paul took his copy of the Objectivist Newesletter that contained Greenspan's article on the gold standard and asked him to sign it upon Greenspan retiring. While he was signing it Ron Paul asked him if he still believed in what he wrote. Greenspan said yes.

Both of these instances lead me to believe that Greenspan actually held ideals other than those he implemented as his various positions in the politics. I have no problem with AG's role in the fed, he was doing a good job there. But why didn't he, with the influence that he had, try to change policy? Why not push for a commodity based currency instead of the fiat system which steals wealth from the people? He is using the same excuse that a benevolent dictator would. It goes back to his first encounter with Rand, when he stated that he wasn't sure that he existed, likewise he wasn't sure he was right about free market capitalism as policy because it wasn't popular.

--Dustan

[Brant Gaede]

Not your paraphrases or interpretations, mind you -- only complete, uninterrupted sentences, between quotation marks, and in full context.

Robert,

The following is not from the book, but it is from the 60 Minutes interview he made, partially to promote the book. It contains the phrase that has the Objectivist blogs and forums all wound up. A commented transcript is here:

Greenspan Defends Low Interest Rates

Sept. 16, 2007

Here is the intro.

(CBS) Alan Greenspan may go down as one of the best chairmen of the Federal Reserve in American history. His 18-year tenure was marked by unprecedented economic growth, budget surpluses and a booming stock market. And he was praised universally for shepherding the economy through the shock of 9/11.

Now he has written his memoir, "The Age of Turbulence," which comes out just as he's coming under fire -- something he's not used to -- for today's housing and lending crises. His critics say he established a pattern of bailing out Wall Street investors.

Greenspan sat down with correspondent Lesley Stahl for his first major interview, defending himself against the criticism that he should've done something to stop the shady practices in subprime lending. In a rare admission, he told 60 Minutes he missed its significance.

Now here is the part that has hardline Objectivists all bent out of shape.

In the end, he became an economist with his own forecasting firm in New York in the 1950s. That's when he became friends with philosopher Ayn Rand, author of "Atlas Shrugged."

"Was this hot off the press when she gave it to you?" Stahl asks.

"It was still warm when I read it," Greenspan says.

Rand advocated a doctrine of unfettered, unregulated capitalism and Greenspan was one of her most famous disciples, though in a twist of fate, he'd later become the nation's top banking regulator.

Rand had a nickname for her friend: the undertaker.

"She thought you radiated gloom. But Rand also thought that you were too much of a social climber," Stahl remarks.

"I don't know how to respond to that. Everybody is a social climber if you want to put it in one way or another. I mean, and the reason fundamentally is inbred in all of us, is the need to get approval of others. And the ultimate form of getting approval is climbing socially," Greenspan says. "I'm guilty, but then the problem is there's no non-guilties out there."

Michael

The problem here is we really don't know what he is talking about.

--Brant

[Michael Stuart Kelly]

Dustan,

The key to Greenspan's role in the fed was made super-clear to me in Woodward's book Maestro, published in 2000, and the seed is present in your quote from Greenspan's memoir, "I knew I would have to pledge to uphold not only the Constitution but also the law of the land, many of which I thought were wrong."

Here are a few quotes from Woodward's book as to what the law prescribed that Greenspan had sworn to carry out:

(p. 29)

Greenspan had fully acquainted himself with the law, which requires that the Fed try to maintain stable prices.

(p. 51)

He wanted to keep focused on the law, which said the Fed was to maintain stable prices—no, or low, inflation—and economic growth that could be sustained year after year. It was tricky.

Greenspan's job as Chairman of the fed was this and he figured out how to do it with small interest adjustments. I think he was a genius at doing what he was sworn to do. He was essentially a government-appointed watchdog whose purpose was to prod the economy in the right direction, not govern it.

The Fed itself is an outsourced private institution contracted by the USA government, with regulatory and monopoly functions. How can one exercise a strict libertarian party line as head of that institution? You can't by the very nature of it. But you can keep a person with dictatorial ambitions from stepping in.

Anyway, I don't see where compromising on a public issue is compromising one's values (I presume you mean moral values). Compromise on public issues is the heart of politics where there are checks and balances. The ONLY alternative that has been instituted until now in human history has been tyranny. A dictator need not compromise on a public issue. He can legally kill those who are too good at opposing him. Americans do not have that alternative.

Don't think Greenspan didn't have limits, either. Here is another very interesting quote:

(p. 35)

In the summer of 1974, Nixon asked Greenspan to become chairman of the President's Council of Economic Advisers, one of the most distinguished posts in government for an economist.

"There's a very good chance I might feel the necessity of resigning in three months," Greenspan warned Nixon's chief of staff, Alexander M. Haig. New wage and price controls would trigger his departure. "I physically would not be able to function and I would have no choice but to resign. And I wouldn't want to do that to you and I wouldn't want to do that to me."

Haig and others assured Greenspan there would be no more forays into wage and price controls.

Just for general information, here are the sections on Ayn Rand in that book. Maybe the last one sheds some light on what value he placed on (and his meaning of) social climbing.

(p. 34)

In 1952, Greenspan met the philosopher and novelist Ayn Rand, a proponent of rational self-interest and radical individualism. The author of The Fountainhead, a popular novel about a libertarian architect, took the young Greenspan, then 26, into her circle. Greenspan was a high-IQ mathematician and economic technician who had adopted the philosophy of "logical positivism," which held that nothing could be known rationally with total certainty. He was an extreme doubter and skeptic. The two got into a long series of debates on the issue of values, ethical systems and the nature and origin of morality.

Young Greenspan, intense, with thick, black, slicked-back hair, thought he could outdo anybody in an intellectual debate, but Rand regularly cornered him. It was like playing chess, and all of a sudden, out of nowhere, she would checkmate him. Rand was compelling, and the young man was enthralled.

Rand and Greenspan argued about the nature of society and the power of the state. She pushed him hard. The matters they disagreed on were those that were not provable one way or the other, Greenspan felt, but he believed that the debates and the intellectual rigor gave him a sense of how to determine what was right and what was wrong in his value system. He felt acutely conscious that he would know when he was compromising the market-oriented, procapitalist principles he and Rand shared.

(p. 56)

Greenspan discontinued his doctoral work to go to work for the National Industrial Conference Board, an economic research group, where he started off as a steel industry analyst. In 1952, he married Joan Mitchell, a painter. Less than a year later, the two realized that their expectations were incompatible, received an annulment and remained friends. It was Mitchell who introduced Greenspan to Ayn Rand.

At one point, Greenspan argued to Rand's circle that his own existence could not be proven beyond doubt. Absolute certainty was impossible. All that one could count on were degrees of probability. Rand and Nathaniel Branden, one of her disciples, came to call Greenspan "The Undertaker."

Branden wrote in his memoir that Greenspan had finally conceded his existence. He told Rand the news: "Guess who exists?"

"What?" Rand exclaimed. "You've done it? The Undertaker has decided he exists?"

Greenspan was never a complete Rand acolyte. He had a separate career and identity, which caused some to mistrust him. He was a dedicated networker who liked to attend social functions in New York. He was a dedicated networker who liked to attend social functions in New York. Branden wrote that he and Rand admired Greenspan's mind but sometimes thought of him as too much of a social climber, too occupied with worldly status. For Greenspan, it was critical to be in contact with people, and social events were an efficient medium of exchange-even though he was visibly uncomfortable and mingled reluctantly, often making a beeline for someone he knew.

Michael

[Aggrad02]

Michael,

I agree with you that he did a good job as Fed Chairman. I even said so in my post. But as chairman of the Council of Economic Advisors he could have pushed for better policy. Also as fed Chairman his word carried a lot of weight, especially since he did such a good job, but never once did he call for an end to the fiat money system. If Greenspan would have went to congress and said that this system is not the best and we need to change it to (X), congress would have probably done it.

It was either in this book or an interview, I can't remember where right now. But Greenspan said that his job at the fed was to keep the monetary system stable, to make sure that it acted like commodity backed currency and that he thinks that he achieved that goal.

But when you look at history our dollar has continued to deteriorate. Right now it is only worth 4 cents compared to when the Fed began and is continuing to go down. How is that moral no matter how well you do it? The Fed also allows banks to fractionally reserve bank. Meaning it allows banks to create credit and charge interest (real money paid back to the bankers) on that credit. If this continues eventually the banks will own everything. Now all of this is not Greenspans fault but he did nothing while he was there to change it. And the reason that he gives for not saying or doing anything about it was that it wasn't socially acceptable in his social group to do so?

--Dustan

[Michael Stuart Kelly]

Dustan,

I remember reading over the years Greenspan saying he backed the gold standard. He was always up front about that. I think that it is unrealistic to imagine if he went to Congress and requested a fundamental currency change, it would have been granted. From what I have been studying, it would have prompted an unnecessary financial crisis.

As to the value of the dollar, I prefer to look at the value of life all around us. If the dollar is only worth 4 cents now, how much more wealthy are average Americans now in terms of goods and services than they were back when the dollar was worth more?

There is only so much one man can do. I think Greenspan will surprise people now because he is not bound by an oath to carry out a certain law and he will start nudging the people in high places he knows for essential reforms. In his words, he can now start pamphleteering. His memoirs is the first sign of this happening.

I want to reiterate my total admiration for this man. If Ron Paul ever makes it, he would be foolish not to make use of Greesnpan's knowledge, experience and wisdom for advice.

Michael

[Aggrad02]

Dustan,

I think Greenspan will surprise people now because he is not bound by an oath to carry out a certain law and he will start nudging the people in high places he knows for essential reforms. In his words, he can now start pamphleteering. His memoirs is the first sign of this happening.

I sure hope he does.

I want to reiterate my total admiration for this man. If Ron Paul ever makes it, he would be foolish not to make use of Greesnpan's knowledge, experience and wisdom for advice.

Michael

I have a ton of admiration for him as well. I was pointing out what I thought was a flaw (we all have flaws, most people more than others, luckily this is the only thing that I see in AG).

And I know that Paul also has a lot of respect for Greenspan, he called him a genius. I hope that if RP wins he would try to get Greenspan to be Sec. of Treasury, giving Greenspan the hat trick.

--Dustan

Edited September 22, 2007 by Aggrad02

[Michael Stuart Kelly]

Yipeeee!

I just got The Age of Turbulence.

Michael

[Alfonso Jones]

Yipeeee!

I just got The Age of Turbulence.

Michael

Still waiting for my copy to arrive in Shanghai.

Alfonso

[Alfonso Jones]

Not just Dagny Taggart. Consider Ayn Rand's expressed disappointment that not one first-rate mind had emerged to comment on Atlas Shrugged.

Do you have a reference? I've never came across anything like this.

--Brant

Brant -

Try Nathaniel Branden's "My years with Ayn Rand" for some examples:

page 203 --- (speaking of the attacks, negative reviews of Atlas Shrugged, etc.) "It's not the attacks that are depressing - I expected that. It's the absence of any good mind with a significant reputation who has come forward to say publicly what Atlas actually is. Someone with the power to make himself heard. I had counted on some kind of better understanding."

page 204 --- "What Ayn wanted most of all was to find minds - men and women of the kind she wrote about. She had imagined, when she sent Atlas Shrugged out into the world, that she would find them. In a twist on George Washington's famous statement, 'Let us raise a standard to which the wise and honest can repair,' she said, 'I have raised a standard, but the wise and honest have not repaired to it.'"

page 205 - "What she longed for now was an outsider, someone she had not educated, a contempotary with eyes that could see and a voice that could speak. No such person appeared."

I recommend reading page 200 and following of My Years with Ayn Rand in this regard.

Alfonso

[Alfonso Jones]

Not just Dagny Taggart. Consider Ayn Rand's expressed disappointment that not one first-rate mind had emerged to comment on Atlas Shrugged.

Do you have a reference? I've never came across anything like this.

--Brant

Now, here (in addition to the Nathaniel Branden quotes above) I cite Barbara Branden from The Passion of Ayn Rand:

page 301 -- "It was not the bad reviews, she said. 'I had told Bennett not to expect a single good review. If there were any, fine, but we couldn't count on it -although I did think I'd get more intelligent smears, I didn't expect them to be such abysmal, stupid hooliganism, to contain such self contradictions and such total distortions of what I'd said.' It was not the outpuroing of hatred directed against her, she said. It was not the initial slow sales of Atlas. It was that there was no one to object to the attacks, no one to oppose them, no one with a public name, a public reputation, a public voice, to speak for her in that world which was villifying her, to defend her, to fight for her, to name the nature and the stature of her accomplishment."

page 302 -- (Branden writing, not a quote from Rand) "Since her achievement was beyond question, what was wrong with a world in which there was no one of stature to announce it from the rooftops?"

Reading the following pages in Passion of Ayn Rand will further inform on this issue.

Alfonso

[Brant Gaede]

Thanks for this work, Alfonso, but these cited references do not mention a "first-rate mind." BB in Passion did state, I believe, that Ayn expressed a desire to meet such.

--Brant

[Alfonso Jones]

Thanks for this work, Alfonso, but these cited references do not mention a "first-rate mind." BB in Passion did state, I believe, that Ayn expressed a desire to meet such.

--Brant

If you are looking for a quote using the exact words "first-rate mind" I'm not certain you will find it. I have not attempted. But I think that it is clear from the provided quotes (and the broader discussion in Passion of Ayn Rand and My Years with Ayn Rand that is what Rand was longing to have - is such a person commenting on Atlas Shrugged.

Alfonso

[Brant Gaede]

Thanks for this work, Alfonso, but these cited references do not mention a "first-rate mind." BB in Passion did state, I believe, that Ayn expressed a desire to meet such.

--Brant

If you are looking for a quote using the exact words "first-rate mind" I'm not certain you will find it. I have not attempted. But I think that it is clear from the provided quotes (and the broader discussion in Passion of Ayn Rand and My Years with Ayn Rand that is what Rand was longing to have - is such a person commenting on Atlas Shrugged.

Alfonso

If it's not in Passion, it's in MYWAR.

--Brant

[Alfonso Jones]

Thanks for this work, Alfonso, but these cited references do not mention a "first-rate mind." BB in Passion did state, I believe, that Ayn expressed a desire to meet such.

--Brant

If you are looking for a quote using the exact words "first-rate mind" I'm not certain you will find it. I have not attempted. But I think that it is clear from the provided quotes (and the broader discussion in Passion of Ayn Rand and My Years with Ayn Rand that is what Rand was longing to have - is such a person commenting on Atlas Shrugged.

Alfonso

More relevant quotes from My Years with Ayn Rand include:

page 210 - "The question is: What of the people I am defending, the men ofr ability? Where are they? Why don't they come forward? Why don't they speak up?"

And if we can settle for "first-class brain" we find, on page 211:

"The problem is that not one first-class brain has stood up in public to defend me - to give me some sense that there's a human race out there and that the struggle is worth it."

Of course, we all understand the nature of quotes in a memoir written long after the events - Branden acknowledged in the Author's Note in the front that "I am not suggesting that all the words have been reported verbatim, but I am confident they are faithful to the essence of what was said and to the spirit and mood of the occasion."

Alfonso

[Brant Gaede]

Ok, Alfo, you win, finally. Uncle!

--Brant

[Bidinotto]

In the minds of many Objectivists, I think there's an unfortunate, tacit equation of "social metaphysics" (being a "social climber" or "second-hander") with being effective in social situations -- including situations involving communication and persuasion. Some Objectivists who have not been socially successful even seem to mask a hostile envy of those who have been, by always accusing the latter of "selling out."

I think the source of this equation stems from a clumsy reading of The Fountainhead, which has them equating "independence" with "indifference" -- or even "isolation." But that's a misreading. In her dramatization of independence in the character of Howard Roark, Rand chose to stress that this particular individual was so independent that he didn't even notice most people around him. But this was not a prescription to social blindness, alienation, and indifference. Roark's trait of aloof social indifference does not characterize many of Rand's other heroes, including Galt, Francisco, and, in The Fountainhead, Kent Lansing and Austin Heller. They noticed everything about others, and they were effective leaders in social situations. Their "paying attention to others" and effective communication was not some failure of independence; it was a tribute to their rationality.

Does anyone seriously wish to maintain that the desire to communicate with and persuade others to be more rational, for example, is a failure of independence? If so, then Galt's Speech is a three-hour illustration of a second-hander's psychology; and Francisco's years of efforts to persuade and recruit others to the Strike is likewise an example of "social metaphysics." Indeed, everyone posting here could be similarly declared a "second-hander," merely for trying to persuade others. Communication presupposes an interest in imparting information to others, or attempting to move them in some way. If we did NOT "care what anyone else thinks," why even bother to learn to speak or write?

"Psychological independence" does not mean become a mute hermit, living off in some cave. It does not mean, in the words of Simon and Garfunkel, becoming the equivalent of a rock or an island.

Likewise, social metaphysics does not mean having no desire to communicate with or persuade others, or having no desire to succeed in social relationships (which include one's career). After all, in the marketplaces of products, services, friendship, or love, we must demonstrate our value to others through effective communication if we are to gain what they have to offer us.

Social metaphysics, or second-hander behavior, means something different and much narrower: It means subordinating or sacrificing one's judgment and actions to the wishes or expectations of others.

A person may authentically want certain people to like him; he may wish to succeed in his career field; he may enjoy recognition, visibility, and social success; he may feel anguished and hurt when he fails in these social arenas; yet, he can STILL be completely independent, morally and psychologically. It's only when he subordinates "I know" to "they say," for the sake of popularity and social success, that he violates the principle of independence and becomes a "second-hander" or "social metaphysician."

Morality -- including the principle of independence -- is about one's actions, not his feelings.

Regarding this subject: I have no way to get inside Alan Greenspan's skull to know exactly where he comes down on any of this. Clearly, he wished to succeed socially and he enjoys the recognition and rewards of other people's good opinion of him. But that does not necessarily make him a "second-hander." Only if he has sacrificed his own knowledge and best judgment of the truth in order to gain and keep those social rewards would he deserve that epithet.

And only HE knows, deep down, if that is the case.

A question: Why is Greenspan's moral and psychological character, or philosophical status, the concern of anyone here? Just wondering.

[Brant Gaede]

Regarding this subject: I have no way to get inside Alan Greenspan's skull to know exactly where he comes down on any of this. Clearly, he wished to succeed socially and he enjoys the recognition and rewards of other people's good opinion of him. But that does not necessarily make him a "second-hander." Only if he has sacrificed his own knowledge and best judgment of the truth in order to gain and keep those social rewards would he deserve that epithet.

And only HE knows, deep down, if that is the case.

A question: Why is Greenspan's moral and psychological character, or philosophical status, the concern of anyone here? Just wondering.

A lot of earning others' esteem has to do with who those others are. As a child I wanted to comport myself so that if I met one of my heroes, say Sky King or Roy Rogers, they would esteem me as worthy of esteeming them.

I don't know the answer to your question, Robert. Maybe the desire that he be a Randian hero? Curiosity? My attitude is let people be who they are and I'll take care of myself. Greenspan had a choice: to be in government service or not. I can't say he made the wrong choice. I do know that you cannot do away with central banking and establish a gold standard without tremendous economic friction and that no one has a rational way to do that except out of chaos or by buying gold for one's own, personal account. We don't lack a gold standard today because he headed the Federal Reserve.

--Brant

Edited September 23, 2007 by Brant Gaede

[James Heaps-Nelson]

Regarding this subject: I have no way to get inside Alan Greenspan's skull to know exactly where he comes down on any of this. Clearly, he wished to succeed socially and he enjoys the recognition and rewards of other people's good opinion of him. But that does not necessarily make him a "second-hander." Only if he has sacrificed his own knowledge and best judgment of the truth in order to gain and keep those social rewards would he deserve that epithet.

And only HE knows, deep down, if that is the case.

A question: Why is Greenspan's moral and psychological character, or philosophical status, the concern of anyone here? Just wondering.

I think Alan Greenspan did about as good a job as anyone could. He had a chance to tell the world what was wrong with the Presidents he worked with after resigning, but didn't except in a limited economic policy fashion.

That means one of two things:

1. He's trying to maintain cover and put out a low inflation blueprint for his successors at the Fed for the forseeable future

2. He truly believes in a utilitarian, value-free approach to economic policy.

Jim

[Chris Grieb]

I watched the Book TV interview with Alan Greenspan today. Now that Greenspan is able to speak English and not Fed speak. Watching this interview I'm glad he was Fed Chairman.

I think C-Span could have found an interviewer who would recognize that Ayn is not pronounced the same as Ann.