Friday, October 23, 2015

Brian Doherty is bitter about Ayn Rand deniers

I blogged about Brian Doherty before - I bought his book "Radicals for Capitalism, A Freewheeling History of the Modern Libertarian Movement" because I didn't realize what a true believer in Objectivism he is or how much he adores Ayn Rand.

A few months ago this Reason article by him, 4 Prominent Ayn Rand Recanters makes clear how devoted he is. The recanters are Neil Peart of the rock band Rush, Paul Ryan, Alan Greenspan and Travis Kalanack, the guy who founded Uber.

I was especially interested in Greenspan since his recantation of Rand occurs at the end of my play DARK MARKET. Like all good Objectivists, Doherty thinks it's just crazy that Greenspan would say that a big part of the 2008 meltdown was lack of regulatory oversight:
By 2008, the retired Greenspan was betraying free market principles by foolishly claiming that it was lack of sufficient regulation and a flaw in his own free market ideology that led to the mortgage-driven 2008 economic downturn rather than recognizing and stressing the role of his own Fed's interest rate policies, federal mortgage lending policies, or the moral hazard of well understood "too big to fail" bailout ideology at least as much.
Now if you aren't up on right-wing economic theories you might not immediately get what he's talking about here, so allow me to translate:

Fed's interest rate policies

Objectivists like Doherty are against the Federal Reserve itself on principle. The notion that the Federal Reserve has the power to influence the sacred Free Market by setting interest rates is evil as far as that are concerned. But even more important, lowering the interest rates to respond to various economic realities can inconvenience the plutocracy, which of course are who Objectivists serve.

Krugman, the Great Satan of the Objectivists (you can see how much they despise him by a quick look through Reason articles here) says this of the interest rate issue:

What is the role of interest in this world? Interest, classically (and I do mean classically, as in Mr. Keynes and the), is the reward for waiting: there’s supposedly a social function to interest because it rewards people for saving rather than spending. But right now we’re awash in excess savings with nowhere to go, and the marginal social value of a dollar of savings is negative. So real interest rates should be negative too, if they’re supposed to reflect social payoffs.
This really isn’t at all exotic — but obviously it’s a point wealth-owners don’t want to hear. Hence the constant agitation for monetary tightening.
And this agitation does real harm. Think about the Fed’s taper talk: ultimately, I think it’s clear that it was an attempt to throw a bone to the tight-money crowd, in a way the Fed hoped wouldn’t do real harm. But it did do harm: long-term rates popped up, and are a significant factor in slowing our economy.
So add the rentiers’ sense of entitlement to the reasons we have made such a botch of macroeconomic policy.

Federal mortgage lending policies

The favorite scapegoat of right-wingers, Fannie Mae and Freddy Mac. Joe Nocera addresses that fallacy:
Over at the conservative American Enterprise Institute, two resident scholars, Peter Wallison and Edward Pinto, have concocted what has since become a Republican meme: namely, that Fannie Mae and Freddie Mac were ground zero for the entire crisis, leading the private sector off the cliff with their affordable housing mandates and massive subprime holdings.
The truth is the opposite: Fannie and Freddie got into subprime mortgages, with great trepidation, only in 2005 and 2006, and only because they were losing so much market share to Wall Street. Among other things, the Wallison-Pinto case relies on inflated data — Pinto classifies just about anything that is not a 30-year-fixed mortgage as “subprime.” The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around.
But Objectivists are never going to blame the private sector for anything. Because that is against their religion.

"Too big to fail" bailout ideology

Objectivists don't object to "bailout ideology" because it enable private gains/public losses, they object to the concept of bailing out banks completely. As far as they are concerned, the economy should have been allowed to completely melt down as this Reason editorial argues. And this makes perfect sense coming from people who worship Ayn Rand and think that Atlas Shrugged was a work of genius that both accurately represented the socio-economic conditions of the mid-20th century as well as being prophetic and a how-to guide for our present time. The premise of Atlas Shrugged is that the way to handle a world run by looters, moochers and parasites is to let the economy melt down and then the Objectivist overlords will return in glory to set up a new era of free market peace and prosperity. Or as Krugman said:
After all, what is Atlas Shrugged really about? Leave aside the endless speeches and bad sex scenes. What you’re left with is the tale of how a group of plutocrats overthrow a democratically elected government with a campaign of economic sabotage. 
And that's why Objectivists, Libertarians and all the other sons of Ayn Rand should be prevented from getting their hands on the workings of government. They are never, ever to be trusted.

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