Musings on the Coast

The Libertarian Blues

The most famous libertarian in American history probably is Ayn Rand, whose institute is based in Irvine. During the 1940s, ‘50s and ‘60s, she wrote a series of novels about how big government is inherently evil. Two of her books, “The Fountainhead” and “Atlas Shrugged,” most particularly celebrated the triumph of human individualism over the state. “The Fountainhead” was made into a 1949 movie starring Gary Cooper and Patricia Neal, and “Atlas Shrugged Part 1” opened in theater’s earlier this month. Undoubtedly, it will cause much celebration among those who hate big government and want it crushed.

What they will not celebrate is that big government was crushed during the recent housing bubble. All the agencies that were supposed to prevent Wall Street and its friends from engaging in system-wide perfidy were castrated. It was not an accident. It was a 30-year long movement.

What most people also do not know is that Ayn Rand was a famous advocate of free love, and one of her acolytes and lovers was Alan Greenspan. Yes, that Alan Greenspan, the one who went on to become chairman of the Federal Reserve. For years, Wall Street and Washington celebrated Greenspan. Journalist Bob Woodward (originally famous for co-authoring “All The President’s Men” about Watergate, and now famous for being the most suck-up-to-power-whore writer of the last 30 years) even wrote a glowing biography of Greenspan. It was euphorically titled “Maestro: Greenspan’s Fed and The American Boom.”

Greenspan was chairman of the Fed from 1987 to 2006, a historic tenure during which at every opportunity he espoused de-regulation. Thus, when the housing frenzy took off in the early 2000s, he did nothing to curb it. In fact, he enabled it. The Fed, and only the Fed, had the total powers necessary to slay it. Example: the highest credit rating is AAA. The government of the United States has it; four, and only four, American corporations have it. Yet, between 2001 and 2007, some $7 trillion of AAA mortgage-backed bonds were foisted onto the public in a churning mania. Even the FBI issued a famous 2004 report stating, “mortgage fraud is pervasive and growing.”

Greenspan’s Fed did nothing. The Securities Exchange Commission did nothing. Big government did nothing. They had no desire; it was against their ideological faith. And it was a faith, like religion:  regulation is bad, period. Forget the facts. Get rid of it. Even if they did want to regulate, between 1999 to 2008, the financial sector spent $3.7 billion on lobbying and campaign contributions to kill any attempts at regulation.

In 2008, the inevitable happened. The economy crashed so hard that the big banks were nationalized (yes, True Believers, that does means “socialized” as in “socialism for the rich and free enterprise for the poor”).   Today, they are back at it again, with too few banks “too big to fail,” all saved with your taxpayer dollars, and all awarding each other obscene bonuses as they lecture us on the appropriate role of government in our lives.

So, flock to “Atlas Shrugged” and discover the virtues of libertarianism. But do not ever attempt to connect the dots to the fallen value or your home, or the loss of your job, or how much closer to the edge you’ve become. You are one of the “little people,” and you could not possibly understand that the problem with government is government.

Michael Ray is a Laguna Beach resident.