“Another ideological god has failed. ‘Governments bad; deregulated markets good’: how can this faith escape unscathed after Alan Greenspan, pupil of Ayn Rand and predominant central banker of the era, described himself, in congressional testimony last October, as being ‘in a state of shocked disbelief’ over the failure of the ‘self-interest of lending institutions to protect shareholders equity.”
The Financial Times
The Future of Capitalism Series
March 9, 2009

Readings

“The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. For centuries, it remained industrious, ambitious and frugal. Over the past thirty years, much of that has been shredded…The country’s moral guardians are forever looking out for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money”…John Bogle, Founder, Vanguard funds, first page of his new book Enough.

“The idea that economic crises, like the current financial and housing crisis, are mainly guided by changing thought patterns goes against standard economic thinking. But the current crisis bears witness to the role of such changes in thinking. It was caused precisely by our changing confidence, temptations, envy, resentment, and illusions—and especially by changing stories about the nature of the economy…The word credit derives from the Latin credo, meaning ‘I believe’”…Professor Robert Schiller, in his new book Animal Spirits. “At some level it’s good to have a framework to think about the world, in which you emphasize the role of incentives and market economics…But I think it led to an excessive ideological belief that there are no market failures, and no issues of distortions of incentives. Also central banks were created to provide financial stability. Greenspan forgot this, and that was a mistake. I think there were ideological blinders, taking Ayn Rand’s view of the world to an extreme”…Professor Nouriel Roubini, The Wall Street Journal, February 21st, 2009

“Ayn Rand--the heroine of America’s libertarian right—described her philosophy as ‘the concept of man as a noble being’ [or humanism], with his own happiness as the moral purpose of his life [or selfishness], with productive achievement as his noblest activity [or the making of money], and reason as his only absolute [or truth is only what you think it is, even if you’re an evil genius with an MBA].’ The Reagan presidency provided opportunities for a few objectivists to try their hand at their most hated institution: government [in reality, the church was as it legitimates limited government]. The most celebrated Randist even survived the passing of the Reagan years. Alan Greenspan was an acolyte of Rand’s in the 1960’s [when our incoming college freshmen first began to pursue money rather than a meaningful philosophy of life]…The Economist, January 1994

“Ayn Rand was a brilliant personality who suffered terrible depression…Rand antagonized almost all her friends, and by the time she died, just two or three were left”…Jim Powell, an admirer reviewing her work.

“Referring to the disastrous advice given by a Merrill Lynch broker who sucked nearly $100 million in commissions from Orange County, Greenspan declared [before Congress] that both brokers and their customers should be ‘unburdened by any perceived need to take into consideration the interest of their counterparties.’ It sounds dull enough-until you realize what he’s driving at. Greenspan expressed the same radical belief more clearly during the 1960’s in a book of essays assembled by his mentor, the novelist and free-market zealot, Ayn Rand” [who authored The Virtue of Selfishness], Worth, Playing God at the Fed.

“The Fed Didn’t Cause the Housing Bubble…All things considered, I personally prefer Milton Friedman’s performance appraisal of the Fed”…Editorial by Alan Greenspan, The Wall Street Journal, March 11, 2009 [conveniently ignoring most economists on the subject, including Friedman’s fellow Nobel laureate in the Chicago School of Economics, Gary Becker.]

“The picture that emerges is one of an intelligent man centered on the self. More than anything else, Alan Greenspan seems to take care of Alan Greenspan. His life and accomplishments turn out to be a fitting monument to Ayn Rand’s philosophy of rational selfishness”…Greenspan’s Fraud, Professor Ravi Batra. 

“We will give people a faith-a positive, clear and consistent system of belief”…“From her start, America was torn by the clash of her political system with the altruist morality [as she mistakenly considered Christianity, which actually teaches to love neighbor as self, not instead of self]. Capitalism and altruism are incompatible; they cannot exist in the same man or in the same society. Today the conflict has reached its ultimate climax” [Amen!]…“I believe in complete, laissez faire, full, unregulated capitalism-not mixed economy”…“My views on charity are very simple. I do not consider it a major virtue, and, above all, I do not consider it a moral duty”…Beliefs of Ayn Rand. [Notice the part about “full, unregulated capitalism]

“Rand died more than a quarter of a century ago, yet her name appears regularly in the discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books and her magnus opus Atlas Shrugged is selling at a faster rate than at any time during its 51-year history”…Yaron Brook, Wall Street Journal, March 14, 2009

“The only social responsibility of a business is to make money”…Nobel economist Milton Friedman’s famous teaching of the 80’s and 90’s

“From 2002 to 2008, the five largest Wall Street firms paid $190 billion in bonuses while earning $76 billion in profits. Last year, they had a combined net loss of $25 billion but paid bonuses of $26 billion”…Gary Schilling, Insights, March 2009 [When selfishness is a virtue, it’s a tiny step to believing the only responsibility of a CEO is to make money for himself.]

“What’s been lost is the idea that a banker has some responsibility to protect the clients interest [and apparently the shareholders’ and employees’ interests as well]”…Nobel Economist Daniel McFadden, Wall Street Journal, August 21, 2008

“Our world is broken—and I honestly don’t know what is going to replace it. The compass by which we steered as Americans has gone. The last time I saw anything like this in terms of disorientation and loss, was among my friends [in Russia] when the Soviet Union broke up”…Head of Merrill Lynch Moscow, The Financial Times, March 10, 2009

“There’s no pill for this kind of depression: The economy isn’t the only reason for our unease. There’s more to it. People sense something slipping away, a world receding, not only an economic one but a world of old structures, old ways and assumptions. The moment we are living now is a strange one, a disquieting one, a time that seems full of endings. Too bad there’s no pill for that”…Peggy Noonan, Wall Street Journal, March 14, 2009 [Stewardism anyone?!]

“Now Is the Time for a Less Selfish Capitalism…Accelerated economic growth is not a goal for which we should make large sacrifices. In particular, we should not sacrifice the most important source of happiness, which is the quality of human relationships. We have sacrificed too many of these in the name of efficiency and productivity growth. Most of all, we have sacrificed values. In the 1960’s, 60% of adults said they believed ‘people could be trusted.’ Today the figure is 30% in both Britain and the U.S…So we need a trend away from excessive individualism and towards greater social responsibility. That is the kind of capitalism we want”
Lord Richard Layard
The Financial Times
March 12, 2009.

Reflections

If you go to Amazon.com and enter the words “ten most influential books,” the first book you will see will be the Bible. The second will be Atlas Shrugged by Ayn Rand. That could be a metaphor for America. And it’s odd as religious historian Martin Marty of the University of Chicago recently wrote Atlas Shrugged negated every line of his Bible. That, in turn, is a metaphor for our credit crisis and confusion over how to get out of it. Obviously, Atlas Shrugged has influenced far more people than Alan Greenspan. It’s been reported that Chris Cox, recent head of the Securities and Exchange Commission, was a disciple. It’s also been reported that junk-bond king Michael Milken re-read Rand’s gospel while in prison. I constantly meet people who read her during the sixties. Some even think she was Christian. 

The truly odd thing however is that I rarely meet a conservative Christian who has even heard of her. I discovered that when an evangelical publisher reviewed my writings about Sir John Templeton, the dean of global investing, during the early nineties. When I contrasted her worldview with that of Sir John, my junior editor took it out as the editor thought Rand was inconsequential. I simply left a line in about her being a major force on Wall Street and in
Washington despite the fact she’d proudly claim to be the “anti-Christ,” for which evangelicals were seeking high and low. I thought it fortunate that my senior editor told me I couldn’t leave it at that and insisted I put the original material back in. It didn’t really matter as no one paid any attention as they were focused on the federal debt, Y2k, and so on.

I’ve since wondered what would happen in evangelical radio and publishing if a Democratic president nominated a Surgeon General who was discipled by one of the world’s most influential atheists who taught expectant mothers have no responsibility toward their unborn fetuses. I’ve yet to understand why that would cause an uproar despite Jesus not mentioning it, while no one cares about Rand, Greenspan, Friedman and so on despite Jesus telling us greed would keep us, and our nation, from entering that old eye of the needle. And as the Good Book tells us, even if we rarely hear it from contemporary religious leaders, judgment still begins in the house of the Lord, or our moral institutions who should understand such matters. As John Paul once explained when echoing John Calvin and other great leaders of our faith, if Christianity ignores economics, or the stewardship of this world, we should not be surprised when cultural leaders embrace alien ideas that are hostile to it. Hence, the worship of Wall Street and CEO’s for Rand’s god: money.

Do I have real hope that Christian leaders, and then more Americans, might wake up and pay attention to the priorities of our patriarchs rather than our personal concerns? Not really. For truth is that most American Christians have adopted major elements of Rand’s new religion. Even we don’t understand the sub-prime mess is a result of a new morality in which the market insists poor people pay more interest than more affluent borrowers. Yet there is a ray of hope that Nobel laureate Robert Fogel, who is a religious skeptic, will be correct in predicting The Fourth Great Awakening. Religious revivals have taken form in the vacuum of nihilism over how we should live, particularly economically. And they often force us to remember why theologians from Richard Niebuhr to John Paul have connected love to responsibility. Should a true and tough love, rather than the greed of the past and the fear of the present, be resurrected in the economic realm, it could mean good things for our economy and culture during coming decades. But until then, I feel the best hope for the stock market is to expect it to fluctuate due to the “financial chaos” Sir John talked about in 2005. The coming deficits may remind people not to put their faith in money and much of it could find its way into stocks and other assets that hedge inflation. Bulls are just bears with money. And there’s lots of that around today. With more to come tomorrow.