Alan Greenspan was the consummate Reaganomic Federal Reserve bank chief of our time. What if he was secretly an un-reconstructed acolyte of Ayn Rand? That's exactly what Peter Hartcher is postulating in the SMH today.
So why is Greenspan opposed, as a matter of principle, to any attempt at reform? Four possibilities come to mind. First, he is senile. But although he is 85, his statements were not the product of a wandering mind. Second, he is in the thrall of the big banks that oppose change. But while he has been taking handsome speaking fees from them in recent years, he has never been interested in money, selling his profitable Wall Street business to work at the Fed on a relative pittance.
Third, he is a blind ideologue who will not concede that any regulation could be good regulation. This is entirely possible. But he knows full well the terrible damage he inflicted on his country.
Or fourth, he is not a fool but a fox, playing a double game.
Greenspan's view is so absurd that it tempts us to wonder. In 10 days we will see the premiere of a movie of the Ayn Rand novel Atlas Shrugged. This cult 1957 novel is a warning against government intervention, a sermon on the virtues of laissez faire, and a reminder that Alan Greenspan was once a close acolyte of Rand and her Objectivist movement. Her 1966 book Capitalism: the Unknown Ideal included an essay by Greenspan on the virtue of the gold standard.
The young Greenspan advocated a return to a system where a government could only issue currency backed by a physical hard asset - gold. He wrote that "gold and economic freedom are inseparable". He derided the current system of fiat money, where a dollar is backed by nothing more than a government promise to honour its debts, as "paper reserves".
In Atlas Shrugged, the libertarian heroes smoke cigarettes branded with little gold-coloured dollar signs. It's unsubtle. The cigarette represents freedom of choice over government regulation; the dollar sign is a campaign message for economic freedom in the form of a gold standard.
It has often been observed that it was ironic that Greenspan, a leading critic of the paper money system, went on to become its chief, his signature appearing on every dollar bill.
But maybe it wasn't historical irony. What if Greenspan never did change his view, instead covertly dedicating his life to destroying the system he so despised? Could it be that he remained a secret agent of Ayn Rand all these years?
Talk about wild speculation. Long time readers would know that I've had a high opinion of Mr. Hartcher in the time I've been keeping this blog. He's always struck me as astute and level-headed to the point of boring. It's nice to see that he actually has a wildly imaginative side. This is the stuff of conspiracy theories and spy novels. We may never find out for sure, but if it's true Greenspa might have been a mole for the ideological lunar right all these years. If not true, then we have to face the other 3 possibilities - that he is senile, greedy or caught up in his old ways - none of which seem unreasonable in of themselves. That being said, it's a remarkable bit of connecting the dots. Ayn Rand to Alan Greenspan to Gold Standard vs. Fiat Money and the Fed to Cheap Credit and Low Interest Rates to Global Financial Crisis. The guy in charge was the guy trying to destroy it all. It wasn't the butler, it was the chief banker at the Federal Reserve!
It's all pretty good and makes for a gripping conspiracy theory-in-the-making. I think Mr. Hartcher missed April Fools by 4 days.
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