23 October 2008

Look not to your own interests...

From the Department of Tooting My Own Horn:

On Tuesday, I preached a sermon in preaching class on Philippians 2:1-13. I opened by talking about the present financial situation, and showed how in a sense, what we have is not a market malfunction but a natural product of the system we have. In a free market, we are all expected to be "rational, self-interested actors," and all the people who might've been at fault in causing this mess were being just that: they were trying to do what was in their own best interest. I then went on to contrast that sort of self-interest with the humility which Christ exhibited, and to which Paul exhorts the Philippians.

So I felt more than a little vindicated when I read that the Maestro himself, Alan Greenspan, backed up my reading of things when he testified with remarkable candor before Congress this afternoon.
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.

“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

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