Can Alan Greenspan Outrun Paul Krugman?
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You're probably familiar with the old joke about two explorers in the jungle who stumble upon a hungry tiger.* As they run for their lives, one explorer shouts to the other, "Why bother? We can't possibly outrun the tiger!"
"I don't need to outrun the tiger," the other explorer replies. "I only need to outrun you!"
That joke crossed my mind as I came across another joke: Paul Krugman's latest column —
--It hasn't "all gone bad." The subprime "catastrophe" represents a subset of a subset of a subset of the securities markets. Ripple effects are, thus far, noticeably lacking.
--As I asked yesterday, what about "predatory borrowers"? Are they to bear no responsibility for their willful and in many cases flagrantly unethical contribution to this situation?
--Who was selling "poisoned toys"? Oh right, Communists. Anti-freedom charlatans pretending that "centrally planned capitalism" could possibly exist. Remind me again what the read-through is likely to be for mortgage lending (or socialized medicine or energy policy or education or ...)?
--Krugman is rebutting not Greenspan but a straw man. Capitalists don't "believe in the perfection of free markets." We only believe in the superiority of free markets over the prognostications and prescriptions of central planner wannabes. We don't believe we can outrun the tiger, but we know we can outrun Krugman.
It's quite simple really: The "greed" of Wall Street will never be more dangerous than the hubris of Washington or its apologist op-ed writers.
(Via no third solution.)
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*I suppose today it's a polar bear. Or a smoke monster. Or something.
"I don't need to outrun the tiger," the other explorer replies. "I only need to outrun you!"
That joke crossed my mind as I came across another joke: Paul Krugman's latest column —
In a 1963 essay for [Ayn] Rand's newsletter, Mr. Greenspan dismissed as a "collectivist" myth the idea that businessmen, left to their own devices, "would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings." On the contrary, he declared, "it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product."A few hasty stitches:
...
In Mr. Greenspan's world, predatory lending — like attempts to sell consumers poison toys and tainted seafood — just doesn't happen.
...
Of course, now that it has all gone bad, people with ties to the financial industry are rethinking their belief in the perfection of free markets.
--It hasn't "all gone bad." The subprime "catastrophe" represents a subset of a subset of a subset of the securities markets. Ripple effects are, thus far, noticeably lacking.
--As I asked yesterday, what about "predatory borrowers"? Are they to bear no responsibility for their willful and in many cases flagrantly unethical contribution to this situation?
--Who was selling "poisoned toys"? Oh right, Communists. Anti-freedom charlatans pretending that "centrally planned capitalism" could possibly exist. Remind me again what the read-through is likely to be for mortgage lending (or socialized medicine or energy policy or education or ...)?
--Krugman is rebutting not Greenspan but a straw man. Capitalists don't "believe in the perfection of free markets." We only believe in the superiority of free markets over the prognostications and prescriptions of central planner wannabes. We don't believe we can outrun the tiger, but we know we can outrun Krugman.
It's quite simple really: The "greed" of Wall Street will never be more dangerous than the hubris of Washington or its apologist op-ed writers.
(Via no third solution.)
---
*I suppose today it's a polar bear. Or a smoke monster. Or something.
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Posted by Kip on
22 December 2007
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