In between spurts of vacuum cleaning and trash dumping, I watched as former Fed Chairman Alan Greenspan confessed to blowing his responsibility over the matter of market deregulation. Greenspan, whom I've lately learned never outgrew his adolescent fixation on Ayn Rand's human-averse theories, actually believed that the market would regulate itself in a perpetual spasm of self interest. He believed fervently that an entity like, oh, AIG, would never never never take an inappropriate risk because doing so might cause it to harm itself. He believed that the profit motive would restrain foolish risk taking.
Well, it didn't, did it?
And do you know why it didn't?
Be warned: You'll need to equip yourself carefully for this demonstration project, and it isn't for the faint of heart:
First, get a giant bag. Then fill it with fresh, hot, buttered popcorn. Then set the bag of steaming hot buttered popcorn amidst four girl-crazy teenage boys. Then stand back.Translated, the boys are the market, their interest in girls the irresistible imperative to restrain themselves, and the popcorn is the bait. You see what happened.
I'm shocked, shocked.
Only a sublime one percent of human beings can self regulate. The rest of us have ever required some fearsome spectre to keep us on the straight and narrow path. For many, that would be Hell. For others, it's a sergeant, the local constabulary, the school principal, mom and/or dad, or the unmatched terror of peer ridicule.
Hell and high school principals weren't invented because humans can self regulate.
Haven't we known since Hammurabi (he'd be an Iraqi if he lived now) that humans cannot self regulate? Isn't that the self evident fact around which all human societies are structured? Isn't that the one irriducible reason for laws, governments, religions, police, traffic lights? For God's sake! That's The First Rule of People!
What I want to know is, if Hammurabi knew that, and I knew that, how come I'm not CEO of a Wall Street investment bank, making $51 Million in annual bonuses and $300 Million annual salary? (OK I made those numbers up, but you get my drift.)
This kind of thing makes me foam-at-the mouth crazy.
Deliberately ignoring The First Rule of People is bad enough, but then predicating the operations of the most important financial exchange in the world upon ignoring The First Rule of People, and THEN ACTING SURPRISED WHEN IT ALL COLLAPSES? Excuse me. This is dumber than a wedge of cheddar.
This kind of thing is what I call Poogie built.
Poogies are a special kind of male. They construct stuff--material, theoretical, strategic, political, it doesn't matter--and then, when it doesn't work, as everyone else knew it wouldn't work, this is what they do. They form panels before Members of Congress (comprised largely of other poogies) where they excrete yards of multi-syllabic words to explain why it was self evidently impossible for anybody, under any circumstances, ever in history to know ahead of time that it wouldn't work.
Poogies make 18-lb travel irons. Poogies pack kleenex in un-dispensible wads. Poogies make seat belts that physically cannot work for anyone with convex breasts larger than 24-A, and poogies make contractor-size packs of sandpaper pads that don't fit the designated sanders.
Market deregulation is a classic example of poogie-built theory. Like the notion that we'd be greeted in Iraq with rose petals; like the idea that a CIA High Alert warning about 9-11 could safely be ignored; like the notion that Brownie would make a great FEMA chief, or W a good president, market deregulation is premised on all that we know about Neptune and nothing we know about Earthlings. It's so idiotic that it's hard to see why anybody ever fell for it in the first place.
Like Ayn Rand's Tazmanian Devil Theory of Human Relations, the notion that the markets will self regulate is a monument both to an abysmal ignorance of human nature and to the power of depraved greed.
Thanks to Alan Bail, of the Church of What's Happening Now for semi-private insights into Greenspan's devotion to Ayn Rand.