By the Way

Testifying in front of Congress, Alan Greenspan admitted free market principles did not work the way in which he thought they would. According to TNR:

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.

“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

I am shocked! Just shocked! A corporation adopting a philosophy of self-interest over public virtue.

Maybe if someone were to "invent" an economic theory that researches how people actually behave economically rather than examine the normative aspects of economic behavior. Then, maybe someone could write a book or someone else could write another book about it.

And, on top of it all, maybe if one of the two presidential choices believed in this theory, maybe for health care or retirement. If that were to happen, then just maybe we would have a better economic policy on how people actually behave.

But, someone will probably object and say "It's not true; it's just a theory!"