Those of us who didn't buy the Randite religion always knew that businesses can't be left to self-regulate. Joining Greenspan in this error is the late Milton Friedman, who insisted that businesses would not market defective products because such an action would damage their reputation. Sure, while enriching their bottom line, and that, in the end, is what businesses care about.
“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.”
Your choice of reasons why intelligent people reach these ridiculous conclusions:
- The triumph of ideology over observation