|FROM ||Ruben I Safir
|SUBJECT ||Re: [hangout] More Greenspan on Copyright
Published on Tuesday, April 18, 2000 in the San Francisco Bay Guardian
The Reserve Chair's Philosophy Differs Little From His Ayn Rand Days
by Ralph Nader
Last year Congress made Federal Reserve Board chair Alan Greenspan a
virtual regulatory czar over financial services corporations.
Considering the waves of adulation that have been sweeping over
Greenspan, the anointment was not a surprise.
It would be reasonable to assume that before placing this important
regulatory power under the Federal Reserve, Congress undertook a careful
review of Greenspan's regulatory philosophy and record. You can toss
that assumption in the nearest trash can.
Congress knows little and cares less about how Greenspan views the
government's role in protecting the public interest and the public
purse. The same is true for the three presidents -- Ronald Reagan,
George Bush, and William Clinton -- who have appointed and reappointed
Greenspan to four terms as chair of the Federal Reserve.
A causal observer of Senate confirmation hearings would be led to
believe that financial regulation has nothing to do with the job of
Federal Reserve chair. The issue never comes up. It is the rarest of
occurrences when a congressional oversight hearing places a Federal
Reserve official in the dock over financial regulatory shortcomings.
Yet Congress, with only half-hearted opposition from the Clinton
administration's Treasury Department, handed Greenspan and the Federal
Reserve the regulatory plums when it authorized the merger of banks,
securities firms, and insurance companies under common ownership in
giant conglomerates. The safety and soundness of the nation's financial
system will rest heavily on how vigorously the Federal Reserve carries
out its responsibility.
For longtime watchers of Greenspan the move was incongruous, if not
outright risky. As a disciple of Ayn Rand, later as an economic guru for
the Republican Party, and still later as a lobbyist for financial
corporations, Greenspan has disagreed with regulation as a tool to
protect consumers and the well-being of a free enterprise economy.
Greenspan has argued that the self-interest of the corporations ? the
desire of corporations to protect their reputation ? was all that was
necessary for consumer protection.
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."
Some may well argue that these diatribes against regulation were part of
a passing phase in Greenspan's career. Perhaps, but this philosophy was
alive and well when Greenspan, as a consultant-lobbyist, badgered
federal regulators. In one case, Greenspan intervened directly with the
principal regulator of Charles Keating's Lincoln Savings in an attempt
to gain special exemptions from regulations for the institution. Risky
investments ultimately brought Lincoln Savings down, sent Keating to
jail, and cost the taxpayers $2.5 billion. Greenspan became chair of the
Greenspan's antiregulation philosophy continues to crop up at the
Federal Reserve. Not only has the General Accounting Office raised
questions about the efficacy of the Federal Reserve's regulation of bank
holding companies, but Greenspan has erected roadblocks to the
collection of data important to consumer protection and fair lending as
In 1996 Greenspan was urged to help in the enforcement of fair lending
laws by collecting data on the race and gender of applicants for small
business and consumer loans. Despite pleas from the Office of the
Comptroller of the Currency and the Civil Rights Division of the Justice
Department, Greenspan and his fellow governors blocked the proposal.
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?
On 2003.04.06 03:38 Ruben I Safir wrote:
> Greenspan says balance needed in protecting intellectual property
> WASHINGTON (AP) -- As the fruits of ever-changing technology play an
> increasing role in the U.S. economy, the country must strike the right
> balance in developing legal protections for innovative ideas or
> "intellectual property," Federal Reserve Chairman Alan Greenspan said
> "Are the protections sufficiently broad to encourage innovation but
> so broad as to shut down follow-on innovation?" Greenspan asked in
> remarks prepared for delivery via a satellite video link to a Federal
> Reserve Bank of Atlanta conference in Sea Island, Ga.
> "How appropriate is our current system -- developed for a world in
> physical assets predominated -- for an economy in which value
> increasingly is embodied in ideas rather than tangible capital?"
> Greenspan asked.
> A copy of Greenspan's remarks was distributed in Washington.
> Among the thorny issues raised by intellectual property rights is how
> define precisely what should be legally protected by a copyright or
> The evolution of the Internet into a communications tool that people
> at home and at work has raised intellectual property rights issues
> concerning musicians, movie makers and others in the new digital
> "Ownership of physical property is capable of being defended by
> the militia or private mercenaries," Greenspan said. "Ownership of
> is far less easily protected."
> In his speech, Greenspan did not talk about the current state of the
> economy or discuss the future course of interest rate policy.
> Greenspan and his Fed colleagues last month decided to hold interest
> rates at a 41-year low of 1.25 percent, saying they would keep a close
> eye on economic developments surrounding the war.
> Brooklyn Linux Solutions
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Brooklyn Linux Solutions
DRM is THEFT - We are the STAKEHOLDERS http://fairuse.nylxs.com
http://www.mrbrklyn.com - Consulting
http://www.inns.net <-- Happy Clients
http://www.nylxs.com - Leadership Development in Free Software
http://www2.mrbrklyn.com/resources - Unpublished Archive or stories and
articles from around the net
http://www2.mrbrklyn.com/downtown.html - See the New Downtown
NYLXS: New Yorker Free Software Users Scene
Fair Use -
because it's either fair use or useless....
NYLXS is a trademark of NYLXS, Inc