Alan Greenspan, Ayn Rand, and State Power

[Dr_Evil_Mouse]

Greenspan Shrugged

Interesting piece, following the news that Greenspan has made it clear that in his eyes, the invasion of Iraq was absolutely all about the oil.

Susan Madrak

So the Washington Post, the New York Times and the Wall St. Journal this morning feature prominent pieces on Greenspan's new memoir.

You will, of course, be surprised to learn that Greenspan is a principled man! Totally above reproach! Loved Bill Clinton, except for the BJ thing! Disgusted with what the Republicans did to his nice economy! Can't believe Bush let the spending get out of control!

I thought we had a golden opportunity to advance the ideals of effective, fiscally conservative government and free markets.

Did I mention that Greenspan is a self-described free-market libertarian? No? Pay attention, because it's relevant in a way that the ladies and gentlemen of the lapdog media ignored during his long tenure.

Greenspan was a longtime associate of Ayn Rand - yes, that Ayn Rand. The one who seemed so very revolutionary when you were 14 or so and first read "Atlas Shrugged."

In an article published in 1963 as part of Ayn Rand's book Capitalism: The Unknown Ideal, Greenspan declared that protection of the consumer against "dishonest and unscrupulous business was the cardinal ingredient of welfare statism."

"Regulation which is based on force and fear undermines the moral base of business dealings," he wrote. "Protection of the consumer by regulation ... is illusory."

Greenspan always believed strongly in deregulation because, well, that's what libertarians believe. For him to pretend he doesn't understand the motivations of the Bush administration's rape-and-pillage pro-corporate mentality is, shall we say, a tad disingenuous. From a Common Dreams article, written in 2000 by Ralph Nader:

This year Greenspan decided to end the collection of nationwide data on bank fees. The survey, which was authorized as part of the financial reforms adopted in 1989, has proven an excellent tool that consumer groups have used to highlight and battle the excessive fees that banks impose on consumers.

Similarly, the Federal Reserve is dropping its "Functional Cost Analysis" study, which has provided important data on how much it costs banks to provide services. This has been a great tool for measuring the validity of bank charges. Credit unions, particularly, have made good use of this data to dramatize fee and interest rate gouging by banks.

But if we believe the words of Greenspan during his Ayn Rand period, he probably doesn't see any need for such data, much less regulation.

And if anyone complains about the loss of such consumer and fair-lending information, Greenspan could send them this excerpt from his writings with Ayn Rand: "Government regulation is not an alternative means of protecting the consumer. It does not build quality into goods, or accuracy into information. Its sole contribution is to substitute force and fear for incentive as the 'protector' of the consumer. The euphemisms of government press releases to the contrary notwithstanding, the basis of regulation is armed force. At the bottom of the endless pile of paper work which characterizes all regulation lies a gun."

And this is the Alan Greenspan who Congress believes should protect the public interest in the regulation of the new financial conglomerates?

So there you have it. According to the Randian wet dream, all regulation is a gun held to the head of Noble Businessmen by jackbooted thugs.

Even if he modified his views somewhat (at least enough to upset other Randians), he still played his part well enough to lead us to the brink of the economic ruin and pending market chaos that is the logical result of blanket deregulation.

One episode in the book as described by the Post is telling:

When he first heard and read details of the Clinton-Lewinsky encounters, Greenspan writes, "I was incredulous. 'There is no way these stories could be correct,' I told my friends. 'No way.' " Later, when it was verified, Greenspan says, "I wondered how the president could take such a risk. It seemed so alien to the Bill Clinton I knew, and made me feel disappointed and sad."

And see, this is the problem with True Believers. They fall in love with an ideal, much the same way a 15-year-old fantasizes about the perfect life she could have with her favorite rock star. They are extraordinarily naive about the complexities of human nature.

I mean, who would ever believe that thievery would run rampart in a deregulated atmosphere? Who knew? Who could imagine that terrorists would fly planes into buildings, or that invading Iraq to steal their oil wouldn't be a cakewalk?

Who could know? Not me! It's not my fault!

For Greenspan to pretend otherwise, to clutch his pearls at the economic fruition of his philosophies, is too hard for any sane person to swallow.

Decent people should shun him. Instead, Beltway politicians and journalists will celebrate him at cocktail parties while the nation falls deeper into the abyss.

[Kanada Kev]

A great piece on Greenspan on 60 Minutes last night too. I just happened upon it. The guy had a pretty wild life too. He toured as a musician (saxophone) in a jazz band among other things.

Good for him for standing up and saying what he's saying, while others feel he should shut up and go away.

[Birdy]

I think it worth note that when you google this writer's name, a whole whack load of "Huffington Post" articles come up.

[Dr_Evil_Mouse]

Not too surprisingly - that's where this article came from.

She's an interesting case, though - did a real polar flip in her politics in recent years. I had to laugh, though, when Bill Maher was accused by Bill O'Reilly in an interview of always trotting out the same old "liberal hacks" (I forget the exact phrase) "like Ariana Huffington", but he was able to say that she hadn't been on his show once over the previous year.

I guess I don't get why it is that people who decide that it's important to start caring about other people can then become legitimate targets of derision.

[Birdy]

I guess I don't get why it is that people who decide that it's important to start caring about other people can then become legitimate targets of derision.

This confuses me.

What do you mean by 'start caring', as if the person didn't care before? And who are you referring to?

[Dr_Evil_Mouse]

I'm just talking about people like O'Reilly, Ann Coulter, and other free-market fundamentalists (Huffington having once been among their ranks), whose bread-and-butter is attacking people who exercise compassion. These then become "socialists", "pussies", "liberals", "bleeding hearts", or whatever.

[Birdy]

I think there's two sides to that coin. O'Reilly, Ann Coulter and other 'free-market fundamentalists' get names attached to them that make 'pussy' look like a white, fluffy kitten. It's been my experience that the left is much worse than the right at name calling.

The whole 'people who decide that it's important to start caring about other people' bit of your post above almost drives me nuts! Ann Coulter and Bill O'Reilly aside, people who may not fall to your side of reality are still capable of compassion.

[Dr_Evil_Mouse]

Anybody can throw mean names around. I'll confess to being as bad as the next guy for that.

Maybe they are; I'm just waiting to see signs of it besides the "if we starve them long enough they'll start digging deeper for food" kind of line. What kind of compassion do, say, libertarians put on the table? I'm not asking that facetiously, either - if it's all up to individuals to take care of themselves, what else can happen? If you set up anything like a system to take care of people, it gets called socialism and is out of the ballpark. What then?

Fwiw, I gave up long ago trying to claim any side on reality. I figure I'm just fucked, and go with that (anybody, though, who doesn't also say they're also fucked, I'm automatically suspicious of ).

[Birdy]

I think you take too much of a philosophical approach to libertarianism than a political one, and that there may be the problem. That and it seems you believe people at the very root don't care about their neighbour. Which can be a hindrance, in the least! :crazy:

For me libertarianism is about deregulation and decreasing the size of government. I think people if left to themselves with no organization from above will create a system of welfare on their own accord, by instinct. It's been happening throughout the ages, beginning in the beginning itself. Where this differs from socialism is in the control factor, when philanthopy becomes mandated. Tax incentives for people/corporations to pay particular heed to not-for-profit charities benefiting those who need care have the possibility to do wonders (and mind you, those not-for-profit agencies have the reputation to be far more effective than their public counterpart). Let alone the mindframe that is created when a person is able to help another and to be able to develop the virtue of humanity versus having an organizing body do that for them. I think a lot of the attitude that people don't care is created by the welfare state itself (see preceding point), and that it creates a bitterness in some people when forced to pay another's way (unfortunate, but true).

[Dr_Evil_Mouse]

I don't know really how to separate the political from the philosophical; I do admit, though, to a certain pessimism about how people treat strangers. It's one thing to live in a small town, as CJ and I have for 2+ years now; it's another to live in, say, downtown Toronto, which we did for a dozen years, and where you get what can most charitably be described as cold indifference (I think of those people described by Jello Biafra, disgusted by the "icky homeless people" they have to step over on their way to the yogurt stand).

Sure, there can be a problem with "Good Samaritan" laws that penalise people for not being "helpful" enough. At the end of the day, though, I see the kind of people drawn to actually work in those public sectors you seem opposed to do so out of some need to help their fellow humans. Why else, I wonder, would they? The pay is typically shit and they have to put up with all sorts of unimaginable frustration and stupidity day after day.

The sad thing is wherever you see government support for some such organisation get threatened or withdrawn - take, e.g., women's shelters. Where's someone who's being beaten by her husband to turn when the neighbours won't take her in because they don't need any more hassle in their own lives?

We are - or, at this point in history, can be - the government! We get to do these things for ourselves, by organising. We should be thankful that we actually can self-organise to do these kinds of things, and not depend on people's capricious ethical whims to see one another through. Some things are serious enough that you shouldn't have to wait for someone to have some kind of ethical lightbulb go off over their head to see it dealt with. That's a very different thing from wanting to see those moments of enlightenment happen for everyone. Lots of people are just, for the time being, too ignorant, stubborn, self-absorbed, or worse.

[Birdy]

I see the political as the method of organizing the philosophical into societal structure, adjusting to make it all fit and work well.

And I admitted in my post above that there is a certain level of pessimism about people, but i think where we differ is that you seem to accept that as universal truth, whereas I ask why and look to find what causes it.

Where i'm stuck is in your positive moments when you claim 'we' are the government and that we should be thankful we can self-organize to provide care for one another, but then come back with your underlying tone that if left up to our own devices we self-destruct and get all greedy. To lay it all out on the line, i don't think you grant humanity the credit it deserves.

My argument exists in that we have societal structures built up and in place that do it all for us, and in doing it for us, make us an apathetic and angry people. And that if one day a nuclear bomb went off and wiped out half of north america, ottawa and washington included, with the other half still standing, you'd see people work together to rebuild and reorganize, helping one another to survive, without tax money being filtered down through government programs. I guess it all falls back to what I said in the union debate, people become comfortable with what they feel secure with. Having to imagine life without it all becomes impossible.

[Dr_Evil_Mouse]

But what is government, but people self-organising?

Ok, that's not a good question - because systems reify, turn into things (rather than, as they should be, processes), that people manipulate and exploit for crasser purposes than helping one another out. Fair enough. My hope is that spontaneity, life, will prevail, and that people will have the necessary spark to do what needs to be done. My fear, though, is that people will cave into their various insecurities to the expense of others.

I dunno. I agree with you that humanity does deserve lots of credit, given that we've got such big brains and such capacities for compassion and generosity, but once you get insecurity, and the instinct for self-preservation kicks in, all bets are off.

This is what keeps driving me back towards "Axial Age" religions (and their offshoots - which is pretty much, well, all you get in the way of religion) - these questions around how living in systems of civilisation fucks us up, and how we need to consider possibilities for alternatives. It's those systems (yes) that are the danger - but try finding some place to exist outside of them. I find it funny, too, how they also all wrestle with the question of whether humanity is at root totally innocent or totally depraved. As far as I can see, the jury's still out.

[d_rawk]

But what is government, but people self-organising?

Ok, that's not a good question

I don't think it's a bad question at all. I agree with Birdy that if left to our own devices, we will voluntarily create, say, welfare systems.

Where I disagree is that I see that already having been left to our own devices, we already have.

[Dr_Evil_Mouse]

But having made those things, apparently, we're controlled by them, and that's bad.

And this is where I'm confused. As soon as you make something to help out, it becomes bad, because people then become subordinated to it.

I'm not trying to be glib, though - that's also true.

[d_rawk]

I suppose. We can unmake those things just as quickly, though. (And there have been subterfuge attempts in that regard, but the body politic has had little patience for it. This gets into interesting territory .. we could say that 'collectively' society has upheld its decision to see these things in place, which would elicit cries of disdain about collectivity. Or we could re-phrase it and say that in a free market place of ideas, these systems are the ones that had most currency and most demand. Choice in the aggregate is still choice in the aggregate, but sometimes people feel all safe and fuzzy with phrases like 'free market' and other people feel safe and fuzzy with phrases like 'consensus decision making', when in the end, the results are the same and they are all just different ways of talking about the balancing of disparate opinions to some concrete end).

I don't feel controlled or subordinate to anything. I've got my place in how these things come about, with no more official influence (that's how I'd want it) and no less official influence (that's how I'd want it) than anybody else.

Of course, I think you are being a bit glib, but then, I think that I am too.

Not insincere, mind.

[Birdy]

Where I disagree is that I see that already having been left to our own devices, we already have.

D-rawk, this isn't a disagreement.

I see the whole idea of social welfare as a work in progress, where when left up to our own devices we created a system, but that the system isn't perfect and it has a few fundamental flaws... the most important being that it takes away from an individuals ability or want to do good. In thinking this, i can't help but look to alternatives as a way of perfecting what we already have. My biggest obstacle is trying to convince others who think the mode of delivery is the core of the system, that the real heart of it is the actual helping of people.

[phishtaper]

didnt Bush say he could impose democracy on Iraq? seems simple enough.

ive just recently gotten into some new research on public perception of various healthcare financing structures: public, private or a mix. still in the design stages, but a cursory review of some of the lit im looking at seems to indicate that generally people want to maintain their own personal abilities to choose how they/we pay for healthcare, prevent others from choosing if those others' choices negatively impact their own choice, and at the same time be able to rely on the public saftey net. in other words, give me everything I want, but dont give anyone else anything I would have to pay (too much) for. from a policy perspective, that's a difficult set of preferences to navigate, so we are looking at ways to establish finance preference equilibria. fun stuff.

[hamilton]

ive just recently gotten into some new research on public perception of various healthcare financing structures: public, private or a mix. still in the design stages, but a cursory review of some of the lit im looking at seems to indicate that generally people want to maintain their own personal abilities to choose how they/we pay for healthcare, prevent others from choosing if those others' choices negatively impact their own choice, and at the same time be able to rely on the public saftey net. in other words, give me everything I want, but dont give anyone else anything I would have to pay (too much) for. from a policy perspective, that's a difficult set of preferences to navigate, so we are looking at ways to establish finance preference equilibria. fun stuff.

The Singaporean model is pretty interesting... and they recently ranked number one in the world in national health care.

[Birdy]

According to Singapore's Ministry of Health webpage...

Our public healthcare facilities fall under 2 broad clusters: the National Healthcare Group (NHG) and

Singapore Health Services (SingHealth). These 2 integrated networks enable comprehensive yet affordable quality healthcare services through co-operation and collaboration between our public healthcare establishments.

The two clusters were incorporated on 1 Oct 2000 with the completion of the restructuring of Alexandra Hospital, Woodbridge Hospital and the polyclinics. Each cluster will provide a full range of acute services ranging from primary care at the polyclinics to secondary and tertiary care at the regional and tertiary hospitals and national centres.

The clustering of the healthcare delivery system would promise co-operation amongst the institutions within the cluster, foster vertical integration of services and enhance synergy and economies of scale. The friendly competition between the two clusters will spur them to innovate and improve the quality of care while ensuring that medical costs remain affordable.

NHG and SingHealth run our public hospitals and speciality centres as private companies. Yet as wholly owned by the government, NHG and SingHealth manage them as not-for-profit organisations. This creates management autonomy and flexibility to respond more promptly to patient needs.

And it's a little dated, but NCPA.org's report on the 2001 international ranking of health care gives the following explanation...

Singapore's Health Care Ranked First in an International Comparison

A new study shows that Singapore's health-care system places first when compared with the health-care systems of seven other countries. Canadian health economist Cynthia Ramsay ranked the health-care systems of Singapore, Canada, the United States, the United Kingdom, Switzerland, Germany, Australia and South Africa.

The study uses an index similar to the United Nations Human Development Index and the Fraser Institute Index of Human Progress. An index score, ranging from zero to 100, indicates how a health care system performs relative to others.

Quality is measured using such categories as health status, mortality rates, preventable illnesses, appropriateness of services and patient satisfaction.

Access to care measures insurance coverage in a population, equity in health outcomes, how health spending is distributed between acute and other health-care services, and the availability of medical expertise and technology.

Cost variables include efficiency and total health spending, and sustainability.

According to the overall rankings Singapore, which relies heavily on private sector financing, has the "best" health-care system with a score of 62.1. Singapore puts much responsibility on patients to finance at least a portion of the costs of their care.

Second-place United Kingdom (60.5), which operates a private system alongside its National Health Service, ranked high largely for its low spending. By contrast, the United States (53.6) ranked just behind Canada (56.7) partially due to its high level of expenditure. Because containing costs is considered beneficial, says Ramsey, "more spending on health is worse than less."

In addition, the U.S. score likely suffered because using insurance coverage in a population as a measure for "access" fails to take into account the large safety net -- such as free medical care that public and private hospitals are required to provide -- available to those who do not have private health insurance or do not enroll in a government program.

Source: Cynthia Ramsay, "Beyond the Public-Private Debate: Access, Quality and Cost in the Health-Care Systems of Eight Countries," Marigold Foundation Ltd., July 2001, 1700-801 6 Avenue, S.W., Calgary, AB T2P 3W2, (403) 303-1804.

[hamilton]

More illuminating:

Overview of the Singapore health system

The Singapore health system is based on a combination of government subsidies (through taxation) and individual responsibility. In order to assist individuals in meeting their component of personal medical expenses, the Government has established the ‘3M’ framework of Medisave, Medishield and Medifund that combine individual responsibility and is overlaid with government funding, particularly to provide a safety net to support the health needs of low income earners and poorer individuals.

Public financing of healthcare

Taxation subsidies

The Government subsidises healthcare through taxation revenue, providing funds for public hospitals and health promotion. As discussed earlier, this amounts to approximately one third of Singapore’s total annual health expenditure.

Medifund

Medifund is an endowment fund set up by the Singapore Government to assist those in financial hardship in funding their medical needs. The scheme is intended as a safety net for those who cannot afford the subsidised charges for hospital or specialist out-patient treatment, after allowing for any Medisave or Medishield funds. Qualification for Medifund provision is means tested, based on an individual’s financial circumstances at the time of application.

Private financing of health care

Medisave

Medisave is a compulsory medical savings scheme with funds available to meet a portion of future personal or immediate family’s hospitalisation, day surgery and certain outpatient expenses.

Medisave is a subset of the mandatory Government pension scheme (the Central Provident Fund or CPF) to which a total of 33 per cent of wages is contributed (comprising 13 per cent employer contributions and 20 per cent employee contributions) to individual accounts to fund retirement and health related expenditure. Of the 33 per cent contribution, around 6 per cent to 8 per cent (depending on age) is credited to the employee’s Medisave account. In practice, Medisave covers approximately 85 per cent of Singapore’s population.

Medishield

Medishield is effectively a national insurance scheme for catastrophic illness that is intended to cover a significant component of medical expenses from major or prolonged illnesses that are not covered by Medisave. Medishield operates under a scheduled reimbursement system based on days of hospitalisation and type of surgical treatment, offset by individuals sharing costs by way of co-payments and deductibles.

The Government has, in recent years, allowed the private insurance market to offer similar Medishield-type policies so individuals now have a choice of choosing between Medishield or a private alternative. Premiums for Medishield (or private insurance alternatives) can be paid from an individual’s Medisave account.

Eldershield

The Government has also recently introduced Eldershield, an extension to the ‘3M’ system. Eldershield is a private insurance scheme designed to help fund future medical expenses incurred in the event of severe disability, particularly at advanced ages.

Private health insurance

In addition to individuals self-financing through Medisave, Medishield and Eldershield, a significant portion of workers (and their dependents) are covered by private health insurance. Private health insurance, which is often funded by employers on behalf of employees, covers a diverse range of medical expenses that are not typically reimbursed under the 3M system.

Direct payments

Invariably, individuals will still need to pay for part of their medical expenses directly, even after receiving reimbursements from Medisave, Medishield or private health insurance. These amounts generally relate to deductibles, co-payments (under Medisave or Medishield) or for over the counter prescription drugs not covered by private health insurance.

What can be learned from the Singapore health care system?

The key to Singapore’s efficient health care system is in its emphasis on the individual to make a significant contribution towards their own healthcare costs. With this focus, the Government has been able to maintain a relatively low level of public expenditure on health for many years with the major burden put on individuals and/or their employers.

The use of compulsory savings (that is, the Medisave account) has been very successful as the main source of private funding for hospital expenses.

Another key focus of the Government has been to ensure that overall health expenditure does not fall victim to the significant inflationary pressures that have been evident throughout the world. This has been achieved by actively regulating the supply and prices of healthcare services in the country.

Although the Singapore health system has been very successful, it is a very difficult system to replicate in many other countries for several reasons:

Singapore has developed its system concurrently with the development of the country over a number of years under the backdrop of political stability enabling successive governments to introduce consistent measures relating to individual responsibility, compulsory savings and regulatory control of healthcare services and costs with a relatively small population of four million people within a concentrated land mass of 660 square kilometres, the planning of a healthcare infrastructure has been somewhat easier than would be the case for larger countries.

Nonetheless, the Singapore health system is one that is certainly worth studying by those countries who continue to be challenged by common healthcare issues such as:

-rising healthcare costs due to advances in medical technology and knowledge

-rising expectations and demands from consumers

-a rapidly aging population which will pose greater demand on health resources in future.

Edited September 28, 2007 by Guest

[d_rawk]

so we are looking at ways to establish finance preference equilibria. fun stuff.

Ears perked way up. Who is the 'we' in this sentence?