As a brilliant young man in his twenties, Alan Greenspan came under the influence of an intense, charismatic, and flamboyantly self-centered woman by the name of Ayn Rand. A talented intellectual, Rand freely manipulated her adoring acolytes, mixing sensuality and sexuality with pseudo-philosophical claptrap that was really rationalization of feelings she experienced as a child in communist Russia.
Convinced of the essential truth of the basic Randian premise—namely, that a free and unbridled economic market will always do the “right” thing—Greenspan spent his long and illustrious career turning idea into practice. Appointed chairman of the Federal Reserve in 1987 by President Ronald Reagan—a post he held until 2006—Greenspan did everything in his power (and his power was considerable) to promote the interests of business and minimize any type of government oversight.
As a result of his work and that of many other advocates of “Reagonomics,” America experienced a period of apparent prosperity in which the rich got immeasurably richer, cheap credit flowed like tap water, and Americans and America quickly became indebted up to their proverbial eyebrows. Meanwhile, money-lending institutions played roulette with investments. The whole house of cards came crashing down in the fall of 2008—a fact that a great many Americans seem to have already forgotten.
Historically, at least since the Industrial Revolution, politics has largely been about struggles between the interests of business and government. Each needs the other to provide balance. But since the Reagan era, the interests of business have so dominated other concerns—from food safety to public health to the waging of war—that the true functions of government have hardly been acknowledged or discussed. Business interests have used powerful organs of communication—most notably, extremist right-wing media such as Fox News and the editorial pages of the Wall Street Journal—to obsessively promote the interests of business over government.
These media—together with lobbyists, right-wing “think tanks,” and pro-business organizations like the national Chamber of Commerce—have been waging war on the American government ever since Republicans lost control of it in the last election. They’ve been working hard to persuade a gullible American pubic that the President is un-American and that citizens of a free and democratic nation shouldn’t have to pay taxes to enjoy its benefits. The remarkable success of the “tea-party” movement—which is much more anti-government than anti-Democratic or pro-Republican—is a measure of their success. (This is not to discount the role of the politically independent libertarian movement—which, by the way, was also greatly inspired by the redoubtable Ayn Rand.)
Here’s the thing: the philosophies that inspire public decision making reside in the minds of real, flesh-and-blood human beings. Human beings are motivated, consciously and unconsciously, by both emotion and reason. They come to conclusions that are sometimes wrong.
Alan Greenspan’s early influence was a bitter woman who never got over her profound resentment of the Russian state for, among other things, taking over her father’s business and turning her family out in the street. She thought with her emotions and rationalized her feelings, coming up with a cockamamie philosophy about the all-mighty dollar that she managed to sell to a great many people.
Greenspan was wrong to put so much faith in that philosophy. Himself a highly influential teacher and persuasive leader, he spent his long career enthusiastically leading America in the wrong direction. To his credit, he’s admitted his mistakes—at least some of them.
Everyone has a philosophy. As individuals and as citizens, it’s our responsibility to review our premises from time to time—to have the humility to consider other points of view, and to admit it when we’re wrong. Public figures need to be wary of being swayed by their own influence over others. Populism is no substitute for critical thinking.