The mess in the USA can be blamed entirely on the American state’s coddling of lending to buy a home. Everybody in the mortgage business came to expect that the taxpayer would bear most of the downside risk. Fannie and Freddie could not buy mortgages issued to poor families, but they held about 20-25% of the mortgage backed paper issued by Wall Street firms.

Mortgage bankers did not care who they lent to, knowing that Wall Street would buy anything. Wall Street did not care what they bought, knowing that they could resell it as mortgage backed securities. Investors did not care what they bought,
because S&P and Moody’s gave it an A rating. Also Fannie and Freddie were holding a lot of the securities that proved disastrous. Finally, investors thought that the US government would back any serious downside risk, because the whole edifice was promoting homeownership among the underclass, and everybody assumed that the Bush and Clinton admins wanted very much to advance that.

This was not cowboy capitalism, but crony capitalism. The privatisation of gains, and the hoped-for socialisation of losses. The consciences of thousands of key players were anesthetised by huge yearend bonuses, with no mechanism for clawing them back should the firm go down the tube. So everybody milked the cow, and nobody worried about keeping it alive. The cow died suddenly, and there’s spilt milk everywhere. The corpse smells, and the dairy industry is idle. We’ll get over it eventually.

Rand would say: get the US government out of the mortgage industry. In such a world, minimum downpayments of 20-30% will become the norm. Accept the fact that in a world of unsubsidized mortgages at least 40% of American families
will have no choice but to rent.

It’s amazing how also here in Europe mainstream media, gloriously succeeds to ‘forget’ informing people of the government’s role and cause in the recession.

Instead the focus is on the ‘extravagant incentives’ of the greedy selfish CEO’s. And if that is not convincing enough it’s the ”speculators and short sellers” ruining ”otherwise sound companies” How? Well, ehm…somehow!!

I’m playing with the idea of founding a ‘Freedom Party Italy’ here!!!

greetings, Ralf, (Torino, Italy)

Thanks…and thank-you for writing to the Star. It’s nice to know about another ally in Canada.

Cheers mate,

Paul

I’ve been following along with you for quite some time now, first took notice at SOLO of all places. And here you were, just a few hundred miles away. Keep up the good work. I definitely enjoy your video drives. Anyway, here’s my note to the editor on the Greenspan / Rand comparisons. I’ll keep checking in and try to contribute whenever I can. Hope it helps.

Best Regards,
Luc Lacerte

Dear Editor,

Certainly you jest. This is a classic “package deal”, exactly what Ayn Rand herself points to on so many occasions in that enlightening way of hers. Alan Greenspan, over the years and for whatever reasons, became as far removed from the ideal of laissez faire capitalism and its proponents (Rand in particular) as could be deemed humanly possible. This guy had a major meltdown along the way. Ayn Rand remained consistent in her convictions to her dying breath. Shame on you.

Luc Lacerte
Hudson, Québec

Yaron Brook (Ayn Rand Centre for Individual Rights)
Greenspan Has No Free Market Philosophy (October 24, 2008)
http://www.aynrand.org/site/News2?page=NewsArticle&id=21757

Josh Wingrove (Globe and Mail)
Greenspan’s Final Break from Rand (October 24, 2008)
http://www.theglobeandmail.com/servlet/story/LAC.20081024.GREENSIDE24/TPStory/International

Mark Finkelstein (NewsBusters – Media Research Centre)
Another Liberal Columnist Criticizes Capitalism
http://newsbusters.org/blogs/mark-finkelstein/2008/10/25/another-liberal-columnist-criticizes-capitalism

Blogs

Gus Van Horn
Alan Greenspan, Coward and Traitor (October 24, 2008)
http://gusvanhorn.blogspot.com/2008/10/alan-greenspan-coward-and-traitor.html

Diana Hsieh (Noodlefood)
Mr. Greenspan = Dr. Stadler (October 24, 2008)
http://www.dianahsieh.com/blog/2008/10/mr-greenspan-dr-stadler.shtml

Tibor R. Machan
Column on Greenspan versus Rand on Self-Interest (October 24, 2008)
http://tibikem.spaces.live.com/blog/cns!B2FD693F4B9A5746!474.entry

David Elmore (The Sidereal Messenger)
The invisible hand slaps Alan Greenspan (October 24, 2008)
http://beerandmind.blogspot.com/2008/10/invisible-hand-slaps-alan-greenspan.html

(Witch Doctor Repellent)
Why Alan Greenspan is full of shit (October 24, 2008)
http://witchdoctorrepellent.blogspot.com/2008/10/why-alan-greenspan-is-full-of-shit.html

mtnrunner2 (Fun With Gravity)
Oh, Alan! (October 23, 2008)
http://funwithgravity.blogspot.com/2008/10/oh-alan.html

Dean Baker (Talking Points Memo)
Greenspan Follies: The World Is as Ayn Rand Would Have Predicted (October 23, 2008)
http://tpmcafe.talkingpointsmemo.com/2008/10/23/greenspan_follies_the_world_is/#more

Jon Taplin (Talking Points Memo)
Libertarianism RIP (October 23, 2008)
http://tpmcafe.talkingpointsmemo.com/2008/10/23/libertarianism_rip/

The Dallas Morning News editorial
When Greenspan’s bubble burst (October 23, 2008)
http://www.dallasnews.com/sharedcontent/dws/dn/opinion/editorials/stories/DN-greenspan_24edi.State.Edition1.285ac96.html

Wall Street Journal Editorial
Another Bubble Bursts (October 24, 2008)
http://online.wsj.com/article/SB122480934587765107.html?mod=googlenews_wsj

Brad Ginesin (Seeking Alpha)
Financial Warning to the U.S. Government
http://seekingalpha.com/article/101691-financial-warning-to-the-u-s-government

Deborah Jones Barrow (WowOWow)
Greenspan Shrugged? Did Ayn Rand Cause Our Financial Crisis? (October 24, 2008)
http://www.wowowow.com/post/greenspan-shrugged-did-ayn-rand-cause-our-financial-crisis-128286

Matthew Rothschild (The Progressive)
Alan Greenspan Falls on His Theory (October 24, 2008)
http://www.progressive.org/mag/wx102408.html

David Corn (Mother Jones)
Alan Shrugged (October 24, 2008)
http://www.motherjones.com/washington_dispatch/2008/10/alan-greenspan-regulation.html

Michael Maiello (Forbes)
Greenspan Testifies: Our Political Language Just Changed (October 24, 2008)
http://blogs.forbes.com/trailwatch/2008/10/greenspan-testi.html

Tim Rutten (L.A. Times)
Greenspan’s blind spot (October 25, 2008)
http://www.latimes.com/news/printedition/opinion/la-oe-rutten25-2008oct25,0,4777431.column

Toronto Star Editorial (October 25, 2008)
http://www.thestar.com/comment/article/524359

Blogs

Roy Edroso (The Village Voice)
Greenspan Disowned By Ayn Rand Cult (October 24, 2008)
http://blogs.villagevoice.com/runninscared/archives/2008/10/greenspan_disow.php

(My Two Cents)
Desecrating Ayn Rand’s Grave (October 24, 2008)
http://whaven33884.blogspot.com/2008/10/desecrating-ayn-rands-grave.html

Chris Packham (The Pitch Blogs)
Pointing the pointer-finger of blame (October 24, 2008)
http://blogs.pitch.com/plog/2008/10/daily_briefs_if_i_had_a_dollar_for_every_daily_briefs_post_id_have_200_dollars.php
(Note: this one is a bit tongue-in-cheek)

Bruce Garrett (The Story So Far…)
Welcome To Planet Earth Mr. Greenspan. And How Was Your Stay On Planet Rand…?
http://brucegarrett.com/brucelog/1931

Crawford Harris (The Couth Hillbilly)
Greenspan Shrugged (October 24, 2008)
http://www.crawfordharris.com/greenspan-shrugged/

Jon Talton (Rogue Columnist)
Who To Blame (October 24, 2008)
http://roguecolumnist.typepad.com/rogue_columnist/2008/10/who-to-blame.html

Greg Nyquist (Ayn Rand Contra Human Nature)
Objectivism & Economics, Part 4
http://aynrandcontrahumannature.blogspot.com/2008/10/objectivism-economics-part-4.html

Good for Party
Greenspan: “My Bad” (October 24, 2008)
http://goodforparty.squarespace.com/journal/2008/10/24/greenspan-my-bad.html

Marx and Coca-Cola
We Won (October 24, 2008)
http://marxandcoca-cola.blogspot.com/2008/10/we-won.html

Tracy Witham (Metaponderance)
Greenspan’s Mistaken Faith in Self-Interest (October 24, 2008)
http://metaponderance.blogspot.com/2008/10/greenspans-mistaken-faith-in-self.html

Eric (ChangeAny1thing.com)
Greenspan, Ayn Rand, and the End of the Free Market (October 24, 2008)
http://www.changeany1thing.com/political/greenspan-ayn-rand-and-the-end-of-the-free-market/

(Rat Tracks)
Shorter Alan Greenspan (October 24, 2008)
http://rattracks.blogspot.com/2008/10/shorter-alan-greenspan.html

(Boulder Dude)
It’s so sad when former lovers squabble… (October 24, 2008)
http://www.boulderdude.com/2008/10/its_so_sad_when_former_lovers.html

(Born Live Love Die)
More of the same (October 24, 2008)
http://bornlivelovedie.com/2008/10/24/more-of-the-same/

(The Rambler)
Greenspan: “John Galt let us down!” (October 24, 2008)
http://cinramble.wordpress.com/2008/10/24/greenspan-john-galt-let-us-down/

Geggy (I’m a slut for the blues)
Atlas Collapses and Dies (October 24, 2008)
http://geg6.blogspot.com/2008/10/atlas-collapses-and-dies.html

(The Tall Thin Guy)
Crazy Al said what? (October 24, 2008)
http://tallnthin.blogspot.com/2008/10/crazy-al-said-what.html

RFK Lives (DailyKOS)
Greenspan admits that Bernie Sanders was right (October 24, 2008)
http://www.dailykos.com/storyonly/2008/10/24/85031/375/1012/640717

Sheldon Richman (Free Association)
What Hath Ayn Rand Wrought? (October 24, 2008)
http://sheldonfreeassociation.blogspot.com/2008/10/what-hath-ayn-rand-wrought.html

George Shollenberger (Teachings:The First Scientific Proof of God)
Theological Science and the Thoughts of Alan Greenspan (October 24, 2008)
http://georgeshollenberger.blogspot.com/2008/10/theological-science-and-life-fo-alan.html

Lee Stranahan (The Huffington Post)
Greenspan (& The Economy) Haunted By Ayn Rand’s Ghost (October 23, 2008)
http://www.huffingtonpost.com/lee-stranahan/greenspan-the-economy-hau_b_137418.html

(Sempringham)
The End of Lunacy? (October 23, 2008)
http://sempringham.blogspot.com/2008/10/end-of-lunacy.html