Monday, March 17, 2008

Alan Greenspan is the Robert McNamara of economics

I was reading Krugman's latest piece on the ongoing meltdown of the capital markets, and he offered this quote:
Meanwhile, false beliefs in the political arena — the belief of Alan Greenspan and his friends in the Bush administration that the market is always right and regulation always a bad thing — led Washington to ignore the warning signs. By the way, Mr. Greenspan is still at it: accepting no blame, he continues to insist that “market flexibility and open competition” are the “most reliable safeguards against cumulative economic failure.”

It hit me: Greenspan, in practice and in retrospect, reminds me of nothing so much as Vietnam-era defense secretary Robert McNamara, the proponent of "the domino theory," and his still-ongoing and increasingly tragic efforts to shift all blame from himself long after the disastrous damage is done.


Greenspan's trumpeting of the ludicrous notion of efficient markets and support for the demise of market regulation will one day been recognized as equivalent folly.

The real tragedy here is that both of these men are geniuses in every sense of the word. It's impossible to watch The Fog of War and not come away impressed with McNamara. I highly recommend that film to anyone who has ever suffered even a little from hubris or ego. McNamara is smarter than you, better educated than you, more subtle and strategic than you, and he still blew it about as badly as a human being in power ever has done. Why? I can only guess, ideology.

Which is exactly how Greenspan has sent our country into our current tailspin.

Coming to a theater near you in 2028, _The Fog of Commerce_.

Hopefully, coming soon to a government near you, competence unblinded by nonsense.

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