FAIR vs FREE

Crooks and Liars has an interesting look at one view of Greenspan and his economics.

Robert Kuttner, author of “The Squandering of America“, has been an advocate for “fair market” controls rather than the “free market” laissez-faire approach on The American Prospect for quite some time. At a book fair, he discusses his issues with former Federal Reserve Chairman Alan Greenspan’s policies on market control:

What was so striking about that book [Greenspan’s The Age of Turbulence], was that half of it is a screed against the need for government regulation—you know, free markets are self-regulating—government doesn’t need to mess with free markets. They’ll correct themselves. And the other half of it is Greenspan’s memoir about all of the times he used the Federal Reserve to bail out failed bets by free markets. Now, how can you have it both ways? Well, if you rule the roost, you can have it any way you want. Fine. But there’s a hypocrisy and there’s a lack of intellectual consistency. Either free markets regulate themselves and the government really shouldn’t do anything—yes, Alan, the Fed is part of the government—or, if you think the markets run the risk of going haywire, you have a duty to regulate on the front end and not just bail them out on the back end. So, I think citizens can raise hell about this and elect people who believe in a managed form of capitalism rather than a predatory form of capitalism.

Kuttner’s article on The Solvency Crisis referenced in the video is here. And Bonddad at HuffPo sees the credit crisis continuing into 2008, as well as inflation of commodities, like oil (now $100/barrel) and gold.

It reminds of what happen with Milton Friedman. He saw his ideas did not always work in practice, but it didn't keep him and his successors from trumpeting the ideas...to this day.