Greenspan on Taxes
There are some real gems in Alan Greenspan's new book, The Age of Turbulence.
Aside from shamelessly running away from the charge that the Fed, under his guidance, created the funny money housing boom that has since gone terribly bust,Greenspan drops at least two other whoppers. One, is that he now believes that "there can be little doubt that global warming is real and manmade." { p. 454} (No footnotes, no citations). Worse, several pages later Greenspan asserts that he is now in favor of sharply higher gasoline taxes to help "wean us off gasoline powered motor vehicles." Higher gas taxes unpopular? No big deal says Alan. "I consider the argument that gasoline tax hikes are politically infeasible irrelevant. Sometimes the duty of political leadership is to convince constituencies that they are just plain wrong." {462}
Comments (22)
We are all capitalists. Greenspan saw the benefits of abandoning his past views in favor of the State. Unlike others, he likely understands the consequences of his actions.
Published: July 26, 2008 7:44 PM
When the ego-driven interventionist becomes consumed and loses touch with reality whoppers are on equal ground with truth and so the choice becomes: 'Which one (the truth or a lie) makes me (me, me, me!) look the best?'
What a distorted perspective because to a truth-seeker the lie makes the ego-driven interventionist look even more perverse!
Published: July 26, 2008 8:49 PM
Although an Austrian, I agree with Greenspan on both counts. If you're a libertarian, you're going to have to concede that the majority is wrong on most issues (see for example ). Secondly, the fact that anthropogenic global warming exists is almost unilaterally accepted by scientists (see ).
On both counts, however, I disagree with Greenspan on the need for intervention and the idea that the state can do a better job than markets can.
Published: July 26, 2008 10:55 PM
The two URLs I linked to were http://econlog.econlib.org/archives/2006/11/the_mirage_of_l.html and http://en.wikipedia.org/wiki/Scientific_opinion_on_climate_change
Published: July 26, 2008 10:58 PM
Ad Sergei: There is fundamental difference, Austrians do not wish state to force everyone to accept their views, while eco-morons usually do.
Global warming might be real, at least many scientists are convinced so. But this question is far from importance of another one: What can we do about global warming? Politicians and many others believe in planned response to this threat. According to them, we should carefully design some strategy and then coerce everyone to act upon it. But as Mises has clearly shown, we are unable (even in principle) to coordinate actions of billions of people. Therefore any "war on global climate changes" is mere hoax.
Published: July 27, 2008 2:56 AM
Sergei,
you say two things; the majority is often wrong; the majority of scientists believe in man-made global warming.
There is no contradiction between libertarian views and support for democracy, as long as the principle of limited government is adhered to. The government should be democratically controlled, but it should be constrained as to what it can do.
As a libertarian, I believe I have inalienable rights, that no government and no majority can take from me.
Published: July 27, 2008 5:22 AM
Alan Greenspan is a statist sellout, whose lack of intellectual integrity is matched by his ego. As Fed Chairman, he orchestrated the two worst financial bubbles since the end of World War II, and characteristically refuses to admit any significant error on his part. Of course, the statist academic and media establishments do not critically challenge his record, but shower undeserved praise on him. After all, it was "The Age of Turbulence."
Like many others, power, influence, notoriety, and wealth drive Greenspan’s actions and statements. And his opinions concerning anthropogenic global warming and the gasoline tax mesh perfectly with his foolish actions as Fed Chairman, lack of respect for unbiased scientific inquiry, and statist philosophy. The truth and scientific integrity mean little to Greenspan and those of his ilk.
The only action of his political career for which Greenspan deserves commendation is his important role in ending the draft.
Published: July 27, 2008 8:55 AM
Wasn't there an article on Junkscience.com a while exposing the so-called myth of the "consensus" regarding AGW?
Published: July 27, 2008 10:07 AM
Sergei,
It is obvious the majority is usually wrong. Look at the lack of support Ron Paul was able to generate among the general public. Read Hoppe's "Democracy the God that Failed."
"... the fact that anthropogenic global warming exists is almost unilaterally accepted by scientists ..." This argument is irrelevant. NeoKeynesianism is almost unilaterally accepted by academic economists. They're all wrong. Medical and scientific discoveries are usually rejected by most scientists until years after their introduction. It took a generation for doctors to finally decide washing their hands before and after delivering babies was beneficial. Dr. Gerald M. Reaven correctly proposed insulin resistance was the cause of metabolic syndrome (which he called syndrome x). He was fired from Harvard for his heresy.
The biggest defect in our educational system (and this is saying a lot) is the inability of people to differentiate fact from propaganda.
Published: July 27, 2008 11:52 AM
Some markets do have negative externalities and incentives to deal with them in the short run are small.
It is impossible to design a system of markets that deals with all negative externalities just as it is to plan an economy. Every time someone tries to deal with these problems under incomplete information, naturally there will be wrong calls. But to say one shouldn't act on principle is, in my view, morally unacceptable.
Courts of law can deal with many things after the fact - what people tend to forget is that these laws are also man-made and based on philosophical principle.
Published: July 27, 2008 12:41 PM
"Sometimes the duty of political leadership is to convince constituencies that they are just plain wrong."
Ha ha, I had to laugh. Ron Paul has been trying tell them they're wrong for the last 30 years.
Published: July 27, 2008 3:37 PM
Secondly, the fact that anthropogenic global warming exists is almost unilaterally accepted by scientists
You might want to cite some sources apart from Wikipedia if you wish to be taken seriously.
Published: July 27, 2008 4:34 PM
In Greenspans book The Age of Turbulence there's a passage on page 297 where Greenspan describes his debate with Li Peng:
"He responded by asking how, if the United States was so devoted to unregulated markets, I could account for Nixon's wage and price controls in 1971. I was delighted that the knew to ask. Not only was he connected to the real world, but also, for a reputed hard-liner, he sounded almost reasonable. I acknowledged that price controls had been a bad policy and that their only saving grace had been to reaffirm that such controls don't work. I added that we had not been tempted since."
Thus does Greenspan (who at that time was controlling interest rates) say that we don't have price controls.
Published: July 27, 2008 6:08 PM
In his earlier days. Greenspan was an ardent admirer of Atlas Shrugged and, as most of the choir here knows, he was part of the "group" that surrounded Ayn Rand after publication of Atlas. He wrote a few articles for the "Objectivist News Letter" and the subsequent "Objectivist." He wrote about anti-trust and the gold standard, railing against big government and fiat currency. I am unable to shake the suspicion that after he took the high preist job, Greenspan, admiring Atlas as he did, decided to act it out along the lines of Francisco D'Anconia. Bottom? Greenspan didn't blow it at the Fed, he Shrugged!
Published: July 27, 2008 8:05 PM
Greenspam is none other than the greedy, immoral, power mongerer he has well proven himself to be. A traitor to American freedom and to his own beliefs seems none to harsh a term.
Alan Greenspan - “Gold and Economic Freedom” 1967
"An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense – perhaps more clearly and subtly than many consistent defenders of laissez-faire – that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other. . . . This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
May his disingenuousness and greed haunt his final days. As Murray would say; "Live it up kid!"
Published: July 27, 2008 9:44 PM
Lowell Sherris said:
"The biggest defect in our educational system (and this is saying a lot) is the inability of people to differentiate fact from propaganda."
That is not a defect of government schooling. That is its main purpose.
Published: July 28, 2008 9:02 AM
marxbites:
What's even more significant (in my view) is that Greenspan was asked by an interviewer--sometime in the relatively recent (10 years) past-- in just what way his present opinion might have changed from that previously expressed (1966 or 7).
His reply is noteworthy. He stated that he currently believed everyrthing he'd previously expressed--and even more strongly.
Blaming Greenspan won't 'cut it." The man simply was corruptible in the same sense as are most humans. The plain fact is that Mises, oiffered the same job, would have refused it. But few are so beyond ordinary temptation. Greenspan likely thought that the position of influence and power might be better in his hands than others'--that he could "manage" while inflicting less damage than those less knowledgeable--it's not an unusual mistake for people--even very knowledgeable people--to make.
No one can do what the Fed is supposed to do--they can merely fail in somewhat different ways and more or less spectacularly--dependent on length in office and circumstances quite beyond their (or any mortal's) control.
The basis of the impossibility is actually at the core between of the rift between Mises and Friedman. Friedman simply believed that liberty would not be irreparably harmed (or compromised) by "management" of the money supply--that such a velvet glove shielding of the iron fist of government was ultimately the "least worst" form of intervention and, thus, desirable in a state in which some intervention was politically unavoidable.
Those who attribute these events to the narrow self-interest or cupidity of the individuals or to conspirators simply miss the fundamental complexity of the entire matter. There's no doubt whatever that Friedman and the rest were (and are) wrong. But what's not at all clear is that Mises (or anyone else, for that matter) had a demonstrably (or even logically practical) solution. If you doubt me on that point, re-read what Mises had to say on the subject: it's rather thin. The best, essentially, that he offered, was that we should "do it all over again but better, this time," so to speak. He recommended a return to the classical Gold Standard--with hardly a word of acknowledgement that the standard itself had been not much more of a way-station on a fixed track leading to the same destination. In other words, the Gold Standard is simply one of the phases through which we've passed on the route to ultimate breakdown. What government has sabotaged in the past, it can (and will) sabotage in the future. (I would say "inevitably" but am not quite that incautious--just would characterize the odds against as "slim to none.")
Mises (and others) were certainly "right" about the flaw in the entire scheme of the management of the supply of money. They were simply unable to offer a solution to the problem that could be shown to offer more than temporary periods of success.
This is, at heart, not a matter of mistakes or flaws in Austrian theory. It's just a matter of incompleteness--of there being no theory (and maybe no firm bases on which to propound such theory) of a practical and durable monetary regime.
I came to this conclusion quite a few years ago--back in 1980 or '81. At the time, I spoke at some length (by phone) on the subject with Leonard Read (late founder of FEE) who spoke of having had similar ideas he'd never discussed for some years, including what I thought was a startling further conclusion: that, if there existed a solution to the problem, that solution would be provided by entrepreneurial action--perhaps even by revolutionary invention.
Published: July 28, 2008 10:43 AM
I do not understand how our monetary problems can be solved given that the Federal government has outlawed all competition in currency production, has imposed legal tender laws, and effectively permits banks to escape paying their liabilities. All this is backed by the full legal force of the U.S. government.
Without detailing the several monetary reform proposals that have been made by Austrian School economists, allowing competition in money production and repealing all legal tender laws would be extremely significant steps towards establishing a stable and ethical monetary system.
Published: July 28, 2008 11:27 AM
I doubt I'll ever read this book, but for anyone who would like to take a look, The Age of Turbulence can be found online through this link:
http://bigpicture.typepad.com/comments/2008/07/age-of-turbulen.html
Published: July 28, 2008 2:39 PM
If Greenspan didn't write anti central banking books in the 60s and didn't get a Rand-ish background he would just be considered a crook.
These background details gives his actions as Fed Chairman a "had to do it" look to the neophyte's eye.
Published: July 28, 2008 4:53 PM
Gene,
I have to disagree. PM's are the least historically manipulatable commodity medium of exchange. I believe everything Greenspan believed in his essay of 1966-7.
And I believe Murray and other Austrians have it right that markets chose PM's based on them being found to be the most efficient means to overcome the problems of double coincidence of wants, and as stores of value. PM's simply ease the barter process.
Of interest maybe is something I heard or read; that Greenspan may have even purposely did what he did to crash the fiat system. I doubt this but it is a probability I guess!
Inflation, and interest for using our own money, and the LONG history of banker special interests agitating for war after war they finance BOTH sides of, to me, are the vile root of our coming dollar collapse.
It's now 1/50th of it's 1932 purchasing power and as far as I know the presses roll on and on and on.
Did anyone here ever watch Ed Griffin's "The Creature from Jekyll Island: A Second Look at the Federal Reserve" on youtube video?
I believe Griffin's, and two of Murray's;
"Wall Street, banks & American Foreign Policy",
& the
"Founding of the Federal Reserve",
are pretty much all one needs to get the big picture.
PM's may have their faults, but certainly are head and shoulders above any other system devised by the golden fleecers of central banking, IMO.
Also is anyone aware that the purported family wealth of the Rothschilds is now in the dbl digit trillions? Or find it odd they aren't at the top of Forbes list?
Rolls of silver Eagles I bought last summer for $300 and shpg, cant be had for less than $400 on eBay today.
Why are the world's fiat currencies today ANY different than 1920's Reichmarks? I think they are not.
Published: July 29, 2008 9:32 PM
marxbites:
Oddly. you're right--but you're wrong! You and I and almost all Austrians agree on all those basic ideas (and you can see that from what I've written). But it's just that a return to the Gold Standard won't work--that much is an empirical fact. We had it and it didn't do the job. Something quite different is needed and nothing quite comprehensive has yet been proposed.
And, incidentally, I'm a bigger proponent of gold as the basis of monetary affairs than anyone of whom I'm aware--it's just that an entirely new (and universally unfamiliar) regime is an absolute requirement. In the past, I announced that I had a proposed solution to the problems that I'd discuss with interested parties. But I'm still not ready and see only disadvantage in any premature exposure of my ideas.
Others (Dennis, above, for instance) have alluded to a condition of the government permitting free-market production of money and of discontinuing their laws regarding legal tender. Again, I disagree.
If we are ever to have (whether nationally or world-wide) money that doesn't cause the problems with which we're familiar, there must be private money production and a complete absence of legal tender laws. Sounds like I'm simply quoting or repeating others, doesn't it? But, I'm not. In my view, governments must be FORCED (though not violently) out of these functions and put in position not to usurp them in the future. An actual revolution of sorts must occur. The potential process is quite clear to me, though I'm not going to expose the details, at least for some additional time. All I will say on the matter is that, if and when I ever am able to expose my plan, it will appear so simple that about half the people on the entire planet will say, " I could have thought of that!"
Part of the key is having a correct understanding of monetary history. In particular, most who are dissatisfied with the conduct of monetary affairs attribute present unsatisfactory (monetary) conditions to a presumption that governments arrogated to themselves a position of power with respect to a commodity (money) that had evolved from the practices of individuals in the course of the development of indirect exchange. Though I cannot prove the correctness of my version, I am of the opinion that the power of governments has come about due to an overwhelming popular opinion that things should be so--that people for thousands of years have insisted on the money function being a responsibility of rulers; most still do. And, until that opinion changes, it's useless to even talk about changes in laws, etc. Here I will provide the one "hint" that should enable some to see the shape of any possible solution. Think about what has, in different times and places, caused almost all the peoples of the world, going back some thousands of years, to insist on their money and its legitimacy as being part of the regular obligation of their rulers.
And that's all I'm going to say on the subject.
Published: July 30, 2008 11:49 AM