He’s No Rand Disciple

By Alex Epstein (Published in American Banker, May 20, 2009)

In a recent story about former BB&T CEO John Allison’s support of Ayn Rand’s laissez-faire ideas, including a gold standard, (“Allison Shrugs”) American Banker repeats an unfortunate misconception about Rand, one that is often used to undermine anyone who agrees with her: “Even former Federal Reserve Board Chairman Alan Greenspan, Rand’s most famous student, has backed away from her ideas as the financial crisis has deepened.”

But Greenspan can’t “back away” from something he hasn’t believed or supported for decades. Remember, this is a man who for two decades reveled in wielding the manipulative power granted to him as Fed Chairman–a job he once (rightly) argued should not exist. The New York Times called him “the infallible maestro of the financial system.” Free markets don’t have “infallible maestros”; they liberate us from such “maestros”–the central planners who have time and again falsely claimed the ability and the right to orchestrate (dictate) millions of economic lives.

Greenspan long ago degenerated into another central planner–and a particularly bad one, both because of his highly inflationary policies (a fundamental cause of the crisis) and because he implemented them under the banner of laissez-faire. If one wishes to understand or argue with the laissez-faire ideas of Ayn Rand, Alan Greenspan is the last person to look to. He stands for free markets about as much as a Chinese censor stands for free speech.

Is Rand Relevant?

By Yaron Brook (The Wall Street Journal, March 14, 2009)

Ayn Rand died more than a quarter of a century ago, yet her name appears regularly in discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books, and her magnum opus, “Atlas Shrugged,” is selling at a faster rate today than at any time during its 51-year history.

There’s a reason. In “Atlas,” Rand tells the story of the U.S. economy crumbling under the weight of crushing government interventions and regulations. Meanwhile, blaming greed and the free market, Washington responds with more controls that only deepen the crisis. Sound familiar?

The novel’s eerily prophetic nature is no coincidence. “If you understand the dominant philosophy of a society,” Rand wrote elsewhere in “Capitalism: The Unknown Ideal,” “you can predict its course.” Economic crises and runaway government power grabs don’t just happen by themselves; they are the product of the philosophical ideas prevalent in a society–particularly its dominant moral ideas.

Why do we accept the budget-busting costs of a welfare state? Because it implements the moral ideal of self-sacrifice to the needy. Why do so few protest the endless regulatory burdens placed on businessmen? Because businessmen are pursuing their self-interest, which we have been taught is dangerous and immoral. Why did the government go on a crusade to promote “affordable housing,” which meant forcing banks to make loans to unqualified home buyers? Because we believe people need to be homeowners, whether or not they can afford to pay for houses.

The message is always the same: “Selfishness is evil; sacrifice for the needs of others is good.” But Rand said this message is wrong–selfishness, rather than being evil, is a virtue. By this she did not mean exploiting others à la Bernie Madoff. Selfishness–that is, concern with one’s genuine, long-range interest–she wrote, required a man to think, to produce, and to prosper by trading with others voluntarily to mutual benefit.

Rand also noted that only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism–and that so long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention–and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.

Rand offered us a way out–to fight for a morality of rational self-interest, and for capitalism, the system which is its expression. And that is the source of her relevance today.

Dr. Brook is president and executive director of the Ayn Rand Institute.

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Here is the link to the Op-Ed in The Wall Street Journal:
http://online.wsj.com/article/SB123698976776126461.html
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Sales of "Atlas Shrugged" Soar in the Face of Economic Crisis

Sales of “Atlas Shrugged” Soar in the Face of Economic Crisis

Washington, D.C., February 23, 2009–Sales of Ayn Rand’s “Atlas Shrugged” have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold.

“Americans are flocking to buy and read ‘Atlas Shrugged’ because there are uncanny similarities between the plot-line of the book and the events of our day” said Yaron Brook, Executive Director at the Ayn Rand Center for Individual Rights. “Americans are rightfully concerned about the economic crisis and government’s increasing intervention and attempts to control the economy. Ayn Rand understood and identified the deeper causes of the crisis we’re facing, and she offered, in ‘Atlas Shrugged,’ a principled and practical solution consistent with American values.”

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Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared on the new Fox Business Network, FOX News Channel, CNN, CNBC and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business and foreign policy at college campuses, community groups and corporations across America and throughout the world.

To interview Dr. Brook or book him for your show, please contact media@aynrandcenter.org.

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The Maestro vs. the Market

By Alex Epstein and Yaron Brook

Alan Greenspan claims that the free market failed to prevent the financial crisis, and that he is “shocked” that his professed “free-market ideology” turned out to contain a “flaw.”

But why should we take him seriously? Greenspan, while once associated with laissez-faire philosopher Ayn Rand, hasn’t advocated genuinely free markets for decades. Remember, this is a man who for two decades reveled in being, as the New York Times put it, “the infallible maestro of the financial system.”
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Free Market Policies Needed to Solve the Crisis

By David Holcberg (Guardian, October 15, 2008)

President Bush said the U.S. government will “aggressively” use a “wide range of tools” to resolve the financial crisis.

Apparently, Bush’s “wide range of tools” is not wide enough to contain a single free market policy. All the “tools” our government has aggressively used to date–bailouts, takeovers, bans on short selling, manipulation of interest rates, creation of fiat money out of thin air, increased spending–have been yanked right out of the socialist and fascist toolkits.

We will only get out of the mess created by our government if it cans all of those “tools” that got us where we are and starts freeing the market from its statist policies.

Read more…

The Road to Fascism

Washington, D.C. – The government has announced that it plans to use $250 billion to buy ownership stakes in various U.S. financial institutions. According to the New York Times, nine major U.S. banks have already been forced into the program.

“The chief executives of the nine largest banks in the United States . . . were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left. . . . ‘It was a take it or take it offer,’ said one person who was briefed on the meeting, speaking on condition of anonymity because the discussions were private. ‘Everyone knew there was only one answer’”–even though at least one institution, the relatively healthy Wells Fargo, wanted to say no.

According to Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “In herding banking executives into a room and making them an offer they couldn’t refuse, the Paulson regime took its latest and most disturbing step yet on the path to state control of the economy.

“If fascism means coercive state control over nominally private property, then there is no more chilling sign of creeping fascism in America than government’s encroachment on the lifeblood of the U.S. economy–its financial institutions. While the government assures us it will be a ‘passive investor,’ merely funneling cash into the banking system rather than dictating how banks function, this is a lie. Not only does the money come with strings attached–such as restrictions on executive compensation, dividend payments, and the types of investments banks can make–but politicians are already promising a web of further controls. As John McCain recently noted, ‘We will not merely inject billions of dollars into companies and walk away hoping for the best. We will require that those companies be reformed and restructured until they are sound assets again, and can be sold at no loss–or perhaps even a profit–to the taxpayers of America.’

“The Paulson shakedown is the latest in a rapid-fire series of government bailouts and interventions over the last several months. Our leaders claim that this virtual takeover of markets is economically necessary. But it was government control of financial markets that spawned the financial meltdown in the first place: an inflationary boom brought on by the Fed’s easy-money policies, a campaign to promote home ownership that encouraged risky loans, regulations that pushed banks to become dangerously over-leveraged, etc., etc. The response to the crisis should be to restore freedom and to disentangle government from the economy. Instead, the same mentality and the same central planners that created the financial crisis are being given far wider reign to manipulate and distort markets. We must tell our government to reverse this fascist course–now.

Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. He is a regular contributor to Forbes.com and a contributing editor of The Objective Standard. His articles have been featured in major newspapers such as USA Today, the Houston Chronicle, the Chicago Sun-Times, the Providence Journal and the Orange County Register. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared in the new Fox Business Network, FOX News Channel, CNN, CNBC, and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business and foreign policy at college campuses, community groups and corporations across America and throughout the world.

Bush Bails Out Subprime Automakers

Washington, D.C. – President Bush just signed into law what the Wall Street Journal describes as “a low-interest loan package to aid U.S. auto makers.”

“Have we learned nothing from the subprime mortgage fiasco?” said Alex Epstein, an analyst at the Ayn Rand Center for Individual Rights. “We are embroiled in a credit crisis, rooted in government policies that promoted and backed reckless, low-interest loans to subprime home buyers–loans that could eventually cost Americans trillions of dollars in bailouts and losses. And now, when lenders on the private market understandably won’t lend $25 billion to car companies that often shed billions by the quarter, the government is making reckless, low-interest loans to these subprime automakers?

“Obviously, our government has learned nothing from the crisis. But it has taught industry a terrible lesson: you fail, you get a bailout.”

Mr. Epstein is an analyst at the Ayn Rand Center for Individual Rights, focusing on business issues. Mr. Epstein’s op-eds and letters to the editor have appeared in such publications as the Wall Street Journal, San Francisco Chronicle, Philadelphia Inquirer, Canada’s National Post, and the Washington Times. He is also a contributing writer for The Objective Standard, a quarterly journal of culture and politics. Mr. Epstein has been a guest on numerous nationally syndicated radio programs.

Don’t Cap CEO Pay: End Bailouts

Washington, D.C. – As the government scrambles to assemble a massive financial bailout package, many are declaring that companies receiving the taxpayer-funded bailouts should face severe restrictions on executive compensation. As Representative Barney Frank put it, “I just think it’s inconceivable that the taxpayer should put some money at risk because of bad decisions made by people who then continue to be rewarded without any restrictions.”

But according to Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “This is nothing more than a political maneuver designed to establish a precedent for regulating all CEO pay. If these long-time critics of executive compensation were really concerned about the injustice of making taxpayers shoulder the burden of others’ mistakes, they would be opposing government bailouts–not making CEOs into scapegoats.

“It’s true that some CEOs performed poorly in the lead-up to this crisis, but that is no reason to allow the government to nullify private contracts. A company sets its CEO’s compensation based on its best guess as to how he will perform. Just as a baseball team can’t refuse to pay its star pitcher his agreed-upon salary after an off year, so a CEO’s poor performance does not justify paying him less than what he was promised.

“The government should not use this crisis as an opportunity to start dictating to shareholders how much they can pay their managers. Doing so will only compound the injustice of this bailout–not lessen it.”

Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. He is a regular contributor to Forbes.com and a contributing editor of The Objective Standard. His articles have been featured in major newspapers such as USA Today, the Houston Chronicle, the Chicago Sun-Times, the Providence Journal and the Orange County Register. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared in the new Fox Business Network, FOX News Channel (The O’Reilly Factor, Your World with Neil Cavuto, At Large with Geraldo Rivera), CNN (Talkback Live and the Glenn Beck Program), CNBC (Closing Bell and On the Money), and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business and foreign policy at college campuses, community groups and corporations across America and throughout the world.